HDFC Standard Life’s financial results give all the right reasons why its stock has gained 24% since it listed on 17 November.

The third largest private life insurer’s results for the December quarter showed that its products are flying off the shelf, and more so in the most coveted retail segment.

New business premium grew by 33% in the nine months ended December to Rs7,070 crore from Rs5,330 crore in the corresponding period a year ago. That trumps the 25% growth for rival ICICI Prudential Life Insurance which also detailed its quarterly numbers.

Although market linked products continued to form the lion’s share of the product mix, HDFC Standard Life managed to increase the share of its protection business in total new business premium to 27.3%.

What sets the insurer apart from its rivals is this high share of protection business. Protection plans formed hardly 4% of ICICI Prudential Life Insurance’s product portfolio in terms of annualized premium equivalent. Morgan Stanley noted HDFC Standard Life’s superiority here and has rated the stock “outperform".

Given the healthy growth across products, the life insurer’s asset under management grew by 27%, faster than the average 20-24% in previous years.

What is to be noted is that such a healthy growth comes on top of the surge in premiums insurers saw during November and December of the previous year due to demonetization.

This means that insurance penetration, especially those of private insurers, is gathering steam and HDFC Standard Life is reaping benefits due to its superior product mix. It should not surprise that many brokerages have rated the stock a buy ever since the listing.

Of course, market-linked products contributed the most given that the surge in stock markets over the last two years has pushed many to invest in such insurance plans.

The stock trades at more than four times its estimated embedded value for fiscal 2019 and given the potential growth, analysts are unlikely to temper their expectations. If the life insurer sustains the current growth rate, the stock would be very attractive, especially when seen with the penetration potential of the industry as a whole.