Buy SBI Life Insurance; target of Rs 1900: Motilal Oswal

Motilal Oswal's research report on SBI Life Insurance

SBI Life Insurance (SBILIFE) reported a decent performance in 1QFY25. APE grew 20% YoY (in line) to INR36.4b, whereas absolute VNB grew 11.5% YoY (a marginal miss of 2.4%) to INR9.7b during the quarter. Strong growth in ULIPs and a blip in protection sales led to a contraction in VNB margin for 1QFY25. VNB margin came in at 26.8% vs. 28.8% in 1QFY24 (our estimate at 27.5%). We expect SBILIFE to deliver an 18% CAGR in APE and VNB over FY24-26, while RoEV is likely to remain ~20%. We reiterate our BUY rating on the stock with a TP of INR1,900 (premised on 2.2x Mar’26E EV).

Outlook

We expect SBILIFE to deliver an 18% CAGR in APE/VNB over FY24-26, while RoEV is projected to remain ~20%. We reiterate our BUY rating on the stock with a TP of INR1,900 (premised on 2.2x Mar’26E EV).