Canara HSBC Life Insurance Company Limited — Q4 FY26 earnings call

Call held 28 Apr 2026

Management summary

Canara HSBC Life Insurance reported strong Q4 FY26 results, marked by robust APE and VNB growth, significant margin expansion, and improved persistency. The company successfully launched its agency channel and maintained a comfortable solvency ratio. However, negative economic variance impacted EV, and geopolitical uncertainties led to a cautious stance on future top-line guidance.

Highlights

  • Individual WPI growth of 19% YoY and APE growth of 20% in FY26, outperforming the industry.

  • VNB for FY26 stood at INR627 crores, registering a growth of 41% YoY, with VNB margin improving to 22.4% from 19.1% in FY25.

  • 13th month persistency rose to 86.3% from 84.4% in FY25, a 1.9% jump, and claim settlement ratio improved to 99.6% in FY26.

  • Successfully launched agency channel, onboarding ~500 distributors and collecting INR14 crores in APE terms within six months.

  • Embedded Value (EV) grew at 18% YoY to INR7,233 crores, with an operating RoEV of 20.7%.

Concerns

  • Economic variance in EV walk was negative INR820 million, primarily due to the fall in equity markets impacting UL VIF.

  • Management refrained from providing specific top-line growth guidance for FY27 due to ongoing geopolitical uncertainties.

  • Full-blown GST impact and agency channel growth are expected to create a negative strain on VNB margin in FY27.

Key financials

  1. Individual APE Growth — +20%YoY
  2. VNB ₹627 Cr +41%YoY
  3. VNB Margin 22.4%
  4. PAT ₹127 Cr +8%YoY
  5. Embedded Value ₹7,233 Cr +18%YoY
  6. Operating RoEV 20.7%
  7. Solvency Ratio 190%
  8. 13th Month Persistency 86.3%

What they filed

Q1 FY27: revenue up 19.8%, net profit up 21.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3,323 1,516 2,783 3,632 2,348 −29%4,202 +177%1,374 −51%4,351 +20%
EBITDA6 -23 34 6 16 +167%-70 −204%116 +241%0 −100%
Net profit37 29 32 23 41 +11%28 −3%35 +9%28 +22%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Profitability

  • VNB Margin Profitability · FY27 · Medium confidence 22-23%

    From 22.4% today

    So in terms of the VNB guidance, it will be around so we'll improve over what we have reported this year. So it will be around the 22% between 22% to 23% range.

    — Tarun Rustagi, Chief Financial Officer

Channel Mix

  • Agency Channel Contribution to APE Channel Mix · next three years · Medium confidence 5%
    And overall we are looking at close to 5% contribution coming from agency over next three years. So I think that's a broad guidance I'd like to give.

    — Anuj Mathur, MD & CEO

  • Alternate Business Share of WPI Channel Mix · next three years · Medium confidence 15%

    From ~9% today

    currently it contributes to roughly 9% of our WPI. We are on this journey to increase share of alternate business to 15% over next three years.

    — Anuj Mathur, MD & CEO

Industry Outlook

  • Industry APE Growth Industry Outlook · Longer term · Low confidence 12-14%
    And over longer term and considering that the regulatory environment continues to be favorable, which it is currently, and the markets also stabilize, I think I can expect growth in the industry to the tune of about 12% to 14%. That's my take in terms of the industry growth.

    — Anuj Mathur, MD & CEO

  • Industry APE Growth Industry Outlook · Current year (FY27) · Low confidence ~10%
    Right. So in terms of business growth, top line growth, my expectation is that in this year, the current year, because of the geopolitical reasons, the industry may grow in the range of about 10% or so.

    — Anuj Mathur, MD & CEO

Capital Adequacy

  • Solvency Ratio Capital Adequacy · implied near-term · Medium confidence upward of 200%

    From 190% today

    So our solvency is going to go back upward of, you know, 200% and that will be sufficient for us to write the additional protection business which we are targeting.

    — Tarun Rustagi, Chief Financial Officer

What to watch in Q1 FY27

Top-line growth guidance for FY27

next quarter
Current Not provided due to geopolitical uncertainties
Target Specific guidance for FY27

Why it matters

Provides clarity on management's outlook for revenue growth, a key indicator of business momentum.

And once there is clarity on this geopolitical front, then we'll be happy to give guidance on the top line also starting from next quarter.

Risks & concerns

  • Global operating environment uncertainty / Geopolitical developments

    medium

    Ongoing geopolitical developments leading to supply-side disruptions and uncertainty in the global operating environment, impacting top-line guidance.

    Management acknowledged

  • Impact of fall in equity markets on UL VIF

    medium

    Fall in equity markets resulted in INR820 million negative economic variance in EV due to impact on UL VIF and fund management charges.

    Both acknowledged

  • Full-blown GST impact and agency channel strain on VNB margin in FY27

    medium

    While GST impact was half-year in FY26, it will be full-blown in FY27, and agency channel growth will also create a negative strain on VNB margin.

    Both acknowledged

Q&A highlights

4 direct, 1 evasive
Negative economic variance in Embedded Value (EV) walk Direct
So the main reason for this is actually the equity reduction, so the fall in equity markets. So that has resulted in the UL, because you know the good proportion of UL is invested in equity. So the future charges, particularly the fund management charges, the impact of that on VIF is the main reason for the economic variance being negative in for this particular year.

Explains a significant negative impact on Embedded Value, attributing it to market conditions affecting UL products.

Asked by Mohit Mangal

VNB margin guidance for future years, considering GST impact Direct
So in terms of the VNB guidance, it will be around so we'll improve over what we have reported this year. So it will be around the 22% between 22% to 23% range.

Provides specific forward guidance on a key profitability metric, indicating expected improvement despite ongoing GST impact.

Asked by Mohit Mangal

HSBC increasing stake in Canara HSBC Life and potential impact of open architecture on LIC's counter share in Canara Bank Partial
So on the first question, I'll say it's a media speculation and as a company we would we don't comment on media speculation... So we will await regulatory guidance, but I would like to confirm that in our case, Canara already has one more option. So in addition to Canara HSBC, they have products from LIC also available on the counter. So that's there. So we don't see this as any kind of big risk for us because we are already in that mode.

Addresses significant market rumors and regulatory changes that could impact the company's structure and competitive landscape, with management downplaying the risk.

Asked by Ansh Mehta

Capital requirement for future growth (protection, non-par, annuity, agency) given current solvency ratio Direct
So I'll start with the first one. So like we mentioned that right now our capital is good enough to take a growth of protection business and various cohorts. And basis the projection which you are asking is, there is definitely if the capital need is there, we will be reaching market and raising the subordinate debt if that is required... So our solvency is going to go back upward of, you know, 200% and that will be sufficient for us to write the additional protection business which we are targeting.

Clarifies the company's capital position and strategy for funding future growth, indicating confidence in current capital and willingness to raise sub-debt if needed.

Asked by Vinod Rajamani

Top-line growth guidance for FY27 given geopolitical uncertainties Evasive
See, on that basis, the current uncertainties which are there, the geopolitical uncertainties, we would not like to give any kind of guidance for the time being. One thing which I'll definitely like to mention and we are pretty confident about that is that our growth will be superior to the industry growth, which you would have seen in the past also, that we'll continue to outperform the industry.

Management explicitly refrains from providing specific top-line guidance due to external factors, signaling caution despite confidence in outperforming the industry.

Asked by Nischint Chawathe

Impact of forthcoming RBI guidelines on disbursable business Direct
See first of all we welcome such changes, but right now they are drafts, so we are looking for final guidelines to be issued and we'll be very happy to implement. In fact our sales practices are well-governed and we'll go with whatever suggestions or the guidelines issued by either RBI or IRDAI.

Addresses potential regulatory changes that could affect business practices, with management expressing readiness to comply.

Asked by Siddharth Rajpurohit

2 min read 7 chapters

Detailed narrative

Strong Business Growth and Market Outperformance

Canara HSBC Life Insurance reported robust performance in FY26, with individual WPI growth of 19% and APE growth of 20%, outperforming the industry. The company's rank among private players improved to 9th from 10th in FY25. Q4 FY26 saw a 15% YoY growth, driven by a strategic shift towards traditional and protection business.

Enhanced Profitability and Value Creation

The Value of New Business (VNB) grew significantly by 41% YoY to INR627 crores in FY26, with the VNB margin expanding to 22.4% from 19.1% in FY25. This margin improvement was attributed to a favorable product mix shift towards protection and better product-level margins. Profit after tax (PAT) increased by 8% YoY to INR127 crores, and Embedded Value grew 18% YoY to INR7,233 crores, yielding an Operating RoEV of 20.7%.

Improved Customer Centricity and Persistency

The company demonstrated strong customer retention, with 13th month persistency rising to 86.3% from 84.4% in FY25, a 1.9% jump. The Net Promoter Score (NPS) improved from 76 to 80, and the claim settlement ratio increased to 99.6% from 99.4%. These metrics underscore the quality of sales practices and customer service.

Strategic Channel Diversification and Agency Launch

The newly launched agency channel is performing in line with expectations, having onboarded approximately 500 distributors and generated INR14 crores in APE terms within six months. Management aims for this channel to contribute 5% of APE over the next three years. Alternate channels also grew by 29% YoY, currently contributing about 9% of WPI, with a target to increase this to 15% over the next three years.

Product Mix Optimization and Protection Focus

The company strategically pivoted towards a more balanced product mix, with the FY26 overall mix between linked and non-linked standing at 51%. The share of total protection business rose to 7% in FY26 from 4% in FY25, with credit life growing 40% YoY in Q4. New product launches in par and non-par segments also contributed to traditional growth.

Capital Adequacy and Regulatory Preparedness

The solvency ratio remains comfortable at 190%, which includes INR250 crores of sub-debt. Management expects the solvency ratio to move upward of 200% and believes it is sufficient for planned growth, including protection business. The company is also preparing for the transition to Ind AS, seeking a one-year forbearance in line with IRDAI guidelines, and is ready to implement forthcoming RBI guidelines on disbursable business.

Economic Headwinds and Cautious Outlook

Despite strong operational performance, the company acknowledged global operating environment uncertainties and geopolitical developments. These factors led management to refrain from providing specific top-line growth guidance for FY27, although they expressed confidence in outperforming industry growth, which is estimated at around 10% for the current year and 12-14% long-term. The negative economic variance in EV was primarily attributed to the fall in equity markets impacting UL VIF.

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