Axis Securities report on SBI Life Insurance
The company’s AUM reported a robust growth of 21% YoY to Rs 3,283 Bn. SBIL’s APE grew 4.5% YoY. VNB margin moderated to 28.8% from 30.1% in Q4FY23, witnessing a contraction of 130bps QoQ mainly due to an increase in ULIP. The cost ratio improved from 11.2% in Q1FY23 to 10.8% in Q1FY24. The key persistency ratio of the 13th and 26th months dropped by 60bps YoY and 260bps YoY respectively. However, the persistency ratio of the 61st month improved by 640bps YoY. New Business Premium (NBP) grew by 11% to Rs 62.1 Bn in Q1FY24 aided by growth in Single premium business by 18%. In total APE, ULIP’s share in the product mix increased. PAT increased by 45% YoY to Rs 3.8 Bn.
Outlook
We remain positive on the stock and maintain a BUY rating with a TP of Rs 1,535/share (2.3x FY25EV), implying an upside potential of 18% from the CMP.
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