Buy SBI Life Insurance; target of Rs 865: Prabhudas Lilladher

Prabhudas Lilladher's research report on SBI Life Insurance

We recently met the management of SBI Life and post the meeting, we are re iterating our positive stance on the stock. The company is changing its product mix and growing in profitable segments and also looking for cross selling / up selling opportunities to enhance growth. We believe the change in MD & CEO of SBI Life will make no difference to the growth and future strategy of the business.

Outlook

We have thus increased our new business APE estimates for FY18 to 37% from 27% and made changes in the product mix which has led to expansion in VNB margins to 17% for FY20 from earlier 16.6%. We maintain BUY with revised TP of Rs 865 (from Rs 840) which translates to 3.1x FY20E EV from 2.9x.