HDFCLIFE.NS
HDFC LIFE INS CO LTDClosedHDFCLIFE.NS discounted cash flow valuation
HDFC LIFE INS CO LTD is a insurance - life company. Its cash flows include lending and deposits, so free cash flow isn't owner earnings and this model can mislead. Compare it with peers on book value and earnings instead.
HDFCLIFE.NS Fair Value
Reverse DCF: today's price implies -19.0% a year of FCF growth for years 1–5, against 12.8% in this model.
Model: 12.8% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 7.83% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | INR 2.69T |
|---|---|
| PV of terminal value (65% of EV) | INR 5.08T |
| Enterprise value | INR 7.76T |
| + Cash & investments | INR 26.97B |
| − Total debt | −INR 30.99B |
| Equity value | INR 7.76T |
| ÷ Shares outstanding | 2.17B |
| Value per share | INR 3,572.13 |
| Market cap | INR 1.18T |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.29% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.51 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 7.85% |
| Pre-tax cost of debt | 7.38% |
| Tax rate | 2.5% |
| Debt / (equity + debt) | 2.6% |
| WACC | 7.83% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.83% | 4,703.26 | 5,217.33 | 5,885.65 | 6,789.98 | 8,082.27 |
| 6.83% | 3,761.81 | 4,074.80 | 4,459.98 | 4,945.62 | 5,576.99 |
| 7.83% | 3,120.46 | 3,326.96 | 3,572.13 | 3,867.98 | 4,232.08 |
| 8.83% | 2,656.23 | 2,800.29 | 2,967.05 | 3,162.36 | 3,394.25 |
| 9.83% | 2,305.21 | 2,409.93 | 2,528.89 | 2,665.22 | 2,823.04 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (FY2026) | — | INR 223.38B | — | — |
| Year 1 | 12.8% | INR 251.97B | 0.927 | INR 233.68B |
| Year 2 | 12.8% | INR 284.22B | 0.860 | INR 244.45B |
| Year 3 | 12.8% | INR 320.61B | 0.798 | INR 255.71B |
| Year 4 | 12.8% | INR 361.64B | 0.740 | INR 267.50B |
| Year 5 | 12.8% | INR 407.93B | 0.686 | INR 279.83B |
| Year 6 | 10.7% | INR 451.75B | 0.636 | INR 287.38B |
| Year 7 | 8.7% | INR 490.96B | 0.590 | INR 289.65B |
| Year 8 | 6.6% | INR 523.46B | 0.547 | INR 286.39B |
| Year 9 | 4.6% | INR 547.33B | 0.507 | INR 277.71B |
| Year 10 | 2.5% | INR 561.01B | 0.471 | INR 263.98B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.