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

BUY

Motilal Oswal's research report on SBI Life Insurance

SBI Life Insurance (SBILIFE) reported strong performance in 3QFY25. APE grew 13% YoY to INR69.4b (5% beat). For 9MFY25, it grew 11% YoY to INR159.7b. Absolute VNB grew 11% YoY to INR18.7b (5% beat). For 9MFY25, it grew 6% YoY to INR42.9b. VNB margins came in at 26.9% vs. 27.4% in 3QFY24 and 26.9% in 2QFY25 (est. 27%). The 46bp YoY margin contraction was mainly due to the shift of the product mix toward ULIPs. In 3QFY25, shareholder PAT grew 71% YoY to INR5.5b (10% beat on estimates). For 9MFY25, it grew 48% YoY to INR16b. This strong growth was supported by higher investment income from the non-par segment and healthy growth of 15% YoY in the renewal book.

Outlook

We have largely maintained our VNB estimates as higher VNB margins have been offset by slower APE growth. We reiterate our BUY rating on the stock with a TP of INR1,900 (premised on 2.1x Sept’26E EV).

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