Prabhudas Lilladher's research report on SBI Life Insurance Company
SBI Life’s NBP was slower with growth of 10% YoY led by a slower group business, while decent retail business growth of 37% YoY in NBP, APE grew by 28% YoY. On effective tax basis, SBILI is catching up toward industry players with 90bps (400bps YoY) improvement seen from FY21 to 24.1%. Margin improvement has been on good mix change mainly from continued protection (best growth amongst listed players – 62% YoY in NBP & 86% in APE). COVID claims & reserving of Rs4.4bn (incl. Rs1.8bn of Q4FY22) is near to industry trends with benefits reaped from mortality changes done in FY21. SBILI has underperformed peers with valuations lowest in the sector and we believe gradual margin improvement, better cost metrics and growth prospects (strong distribution) will help catch up on valuations.
Retain BUY with revised TP of Rs1,250 (from Rs1,150) based on 2.5x Sep-23 (rolled over from Mar-23).
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