Buy SBI Life Insurance; target of Rs 2000: Motilal Oswal

Motilal Oswal is bullish on SBI Life Insurance recommended buy rating on the stock with a target price of Rs 2000 in its research report dated April 24, 2025.

Broker Research

April 25, 2025 / 22:55 IST

buy

live

bselive
nselive

Volume

Todays L/H

Motilal Oswal's research report on SBI Life Insurance

SBI Life Insurance (SBILIFE) reported 2% YoY growth in new business APE to INR54.5b (in line). For FY25, it grew 8% YoY to INR214.2b. Absolute VNB grew 10% YoY to INR16.6b (14% beat). VNB margin for the quarter stood at 30.5% vs. our estimate of 27.4% (28.3% in 4QFY24). For FY25, VNB grew 7% YoY to INR59.5b, reflecting VNB margin of 27.8%. The strong growth in VNB was attributed to a significant shift in the product mix to non-ULIP products. Shareholder PAT remained flat YoY at INR8.1b (6% miss) in 4QFY25. For FY25, it grew 27% YoY to INR24b. Management expects 13-14% individual APE growth in FY26, which will be slightly above industry growth of 12% on the back of continued expansion and productivity improvement of agency channel (expecting 25% growth for FY26) and stable momentum in bancassurance channel (expecting 8-10% growth for FY26). VNB margin is expected to maintain the 27-28% range in FY26.

Outlook

We expect SBILIFE to clock a CAGR of 15%/17% in APE/VNB over FY25-27, while RoEV is likely to remain at ~19% over FY27. We have slightly cut our APE estimates considering company guidance and have increased our VNB margin estimates due to an expected shift toward traditional products and improvement in product-level margins. We reiterate our BUY rating on the stock with a TP of INR2,000 (premised on 2.0x FY27E EV).

For all recommendations report, click here