Buy SBI Life Insurance Co; target of Rs 2015: Asit C Mehta

Asit C Mehta report on SBI Life Insurance Co

SBI Life Insurance reported premium income lower than our estimates by 6% mainly due to weakness in the group insurance and muted growth in the bancassurance cahannel. In terms of APE, growth was muted at 3% YoY, lower than our estimates by 4%. VNB declined by 3% YoY due to increased sale of ULIP products and high base of last FY while VNB margin reported a degrowth of 159bps. The company continues to launch new products to diversify its product offerings and is working on Agency 2.0 to strengthen its agency network. Although, the quarter remained muted in terms of APE/VNB growth, the company remains optimistic about the path going ahead and expects APE growth of 15-17% YoY.

Outlook

We expect its APE/NBP to grow at 17%/21% CAGR over FY24-27E. The company is currently trading at P/EV multiple of 2.3/2.0/1.7x of its FY25/26/27E embedded value. We maintain ‘Buy’ on SBI Life Insurance with a target price of Rs 2,015; valuing the company at 2.5x on its FY26E embedded value.