For ultra long term perspective i would advice against sectoral trends or bets like Smart meters or Solar plays or transformer plays.

It would be far better to go with select mid cap or small cap stocks which are in non cyclical sectors. Energy, Pharma, Niche IT(product oriented rather than service oriented), Hospitality, Finance, Healthcare and even Mining would be better bets. Stock specific of course depends on individual.

From latest release: https://www.bseindia.com/xml-data/corpfiling/AttachLive/09a95453-210e-4485-8450-b7105c4b0c47.pdf

Highlights:

• Net Profit for Q4 FY24 stood at Rs. 724 crore as compared Rs. 803 crore in Q4 FY23 – 10% Decline.

• PAT increases by 21% YOY to Rs. 2,957 crore for FY 24 (PAT increased 28% YoY excluding trading gains)

• Asset quality continues to be maintained at all-time best of GNPA and NNPA of 1.88% and 0.60% respectively.

• All legacy infrastructure loans are fully factored into the above NPA. Excluding infrastructure loans, the GNPA and NNPA is only 1.55% and 0.42% respectively

• CASA ratio continues to be among the best in the industry at around 47%.

Yearly:

• Net Interest Income (NII) grew 30% YOY from Rs. 12,635 crore in FY23 to Rs. 16,451 crore in FY24.
• Net Interest Margin increased from 6.05% in FY23 to 6.36% in FY24, based on AUM.
• Provisions increased 43% YOY from Rs. 1,665 crore in FY23 to Rs. 2,382 crore in FY24.
• RoA stood at 1.10% for FY24; RoE stood at 10.30% for FY24.

Quarterly:

• Net Profit for Q4 FY24 stood at Rs. 724 crore as compared Rs. 803 crore in Q4 FY23.
• Net Interest Income (NII) grew 24% from Rs. 3,597 crore in Q4 FY23 to Rs. 4,469 crore in Q4 FY24.
• Core PPOP (Pre-Provisioning Operating Profit excluding trading gain) for the quarter grew by 22%
• from Rs. 1,342 crore in Q4 FY23 to Rs. 1,632 crore in Q4 FY24.
• Provisions increased 50% from Rs. 482 crore in Q4 FY23 to Rs. 722 crore in Q4 FY24.

Deposits & Borrowings:

• Total Deposits of the Bank increased by 38.7% YOY from Rs.1,44,637 crore as of March 31, 2023 to Rs. 2,00,576 crore as of March 31, 2024.
• CASA Deposits grew by 31.7% YOY from Rs. 71,983 crore as of March 31, 2023 to Rs. 94,768 crore as of March 31, 2024.
• CASA Ratio stood at 47.2% as of March 31, 2024.
• Legacy High-Cost Borrowings reduced from Rs. 17,673 crore as of March 31, 2023 to Rs. 11,809 crore as of March 31, 2024.
• The Bank opened 135 new branches during FY24 to reach branch count of 944 by March 31, 2024.

Loans and Advances:

• Loans and Advances (including credit substitutes) increased by 25.1% YOY from Rs. 1,60,599 crore as of March 31, 2023 to Rs. 2,00,965 crores as of March 31, 2024.
• Infrastructure Project finance now constitutes only 1.4% of total funded assets as of March 31, 2024.
• Exposure to top 20 single borrowers improved from 7.0% as of March 31, 2023, to 5.7% as of March 31, 2024.
• Total Credit to Deposit Ratio improved from 107.0% as of March 31, 2023 to 98.4% as of March 31, 2024.

Asset Quality:

• Gross NPA improved from 2.51% as of March 31, 2023 to 1.88% of March 31, 2024.
• Net NPA improved from 0.86% as of March 31, 2023 to 0.60% of March 31, 2024.
• Excluding infrastructure financing, the GNPA and NNPA of the Bank is 1.55% and 0.42% respectively as of March 31, 2024.
• Provision Coverage Ratio (including technical write-off) has increased from 80.29% as of March 31,2023, to 86.58% as of March 31, 2024.
• Net Stressed Assets as % of total Assets improved from 0.84% as of March 31, 2023 to 0.56% as of March 31, 2024.

1. Revenue and Profitability: The total revenue is ₹4222.19 lakh, compared to ₹5968.38 lakh in the previous quarter and ₹5262.00 lakh for the same quarter the previous year. The net profit for this period was ₹1215.25 lakh, reflecting a decrease from ₹1632.11 lakh in the previous quarter .
2. Earnings Per Share (EPS): The basic EPS for the quarter was ₹0.50, which is lower compared to ₹0.67 in the previous quarter .
3. Expenses: Total expenses for the quarter were ₹2636.99 lakh, with significant expenses in cost of materials consumed and employee benefits. This is an increase from the previous quarter’s expenses of ₹3758.90 lakh .
4. Segment Performance: The company operates primarily in communications and signal processing products, which generated a revenue of ₹4217.18 lakh for the quarter. The healthcare segment reported significantly lower revenue of ₹5.00 lakh .
5. Financial Position: The company’s total assets as of March 31, 2024, stood at ₹21584.54 lakh, with segment assets mainly held in communications and signal processing products .
6. Cash Flow: The net cash inflow from operating activities was significant, amounting to ₹6829.74 lakh for the year, which is a substantial increase from the previous year’s ₹444.90 lakh. However, there was a net cash outflow from investing activities amounting to ₹4549.41 lakh .
   https://www.bseindia.com/xml-data/corpfiling/AttachLive/7e5fdecb-2d76-42ec-bda3-2d95c98b0201.pdf

Q4 FY24 Update:

No. of shares = 215 cr (As of 31-12-2023 as per published data)
Embedded value (12MFY24) = 47,468 Cr
VNB (12MFY24) = 3501 Cr

IEV + VNB (12MFY24)/share = 47,440/215 = 237.06

Valuation(27/Apr/24) = 587 / 237.06 = 2.47x

This looks low as compared to historic valuations, if my calculations are correct.

HDFC LIFE has delivered a profit after tax of Rs. 1,569 crore, implying a YoY increase of
15%, fuelled by 18% increase in profit emergence from back book. This also looks reasonable inspite of headwinds during FY24.

Management is targetting more business from HDFC Bank going forward, and also more growth from Tier 2/3 cities. Whether these aspirations can be translated into reality, need to be looked at after few quarters.

P/B is lower as compared to LIC and SBI LIfe, but Market Cap/Sales is higher. PAT growth over 5 years is less than SBI LIFE but better than ICICI Pru Life.

It is not undervalued based on these parameters, but other parameters relevant to Insurance business mentioned above could be more useful to decide valuations.

Invested and Long term story looks intact, but overhang on stock price may continue.