Motilal Oswal Recommends Canara HSBC Life Insurance for Rs 180 Target Price

Motilal Oswal Raises BUY Rating on Canara HSBC Life Insurance

Canara HSBC Life Insurance (CANHLIFE) has reported a 12% year-over-year (YoY) growth in Annual Premium Equivalent (APE) to INR7b for the quarter, in line with expectations. The company's individual APE witnessed a 15% YoY growth, while the overall APE for FY26 grew by 20% YoY to approximately INR28b.

A significant contributor to the company's stellar performance was the growth in traditional products, which accounted for around 80% of the contributions. As a result, the company's Value of New Business (VNB) grew by a remarkable 49% YoY to INR2.1b, beating estimates by 35%. This led to a VNB margin of 30.5%, a significant increase from 23% in the fourth quarter of FY25. The company's VNB for FY26 grew by 41% YoY to INR6.3b, with the VNB margin expanding by 330 basis points YoY to 22.4%.

In light of the strong performance in the fourth quarter of FY26, Motilal Oswal has maintained its APE estimates and increased VNB margin estimates by 200 basis points each for FY27 and FY28. This has led to a 2% increase in the company's Enterprise Value (EV) estimates for FY27 and FY28. As a result, the research firm has reiterate its BUY rating on Canara HSBC Life Insurance, with a target price of INR180, based on 1.7x FY28E EV.

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