Buy SBI Life Insurance; target of Rs 1700: Motilal Oswal

Motilal Oswal's research report on SBI Life Insurance

SBILIFE reported decent performance in 3QFY24. APE grew 13% YoY (22% beat), while VNB grew 11% YoY as margins contracted 40bp YoY to 27.4%. PAT grew 6% YoY to INR3.2b (vs. our estimate of INR 4.0b, registering 20% miss). In terms of NBP, Group Savings and ULIPs witnessed a healthy YoY growth of 54% and 16%, respectively, while Par savings declined 17% YoY in 3QFY24. The protection business was flat YoY.

Outlook

We expect SBILIFE to deliver 18% CAGR in APE over FY23-26E, thus enabling a 16.4% VNB CAGR. RoEV is expected to stay at around ~20%. We reiterate our BUY rating on the stock with a TP of INR1,700 (2.3x Sep’26E EV).