HDFC Securities' research report on SBI Life Insurance
Over FY21E we expect covid-19 and changes in personal taxation to cause significant disruption to insurance sales (FY21E APE: -13.1% YoY). We however take a longer term view on the business and appreciate the strong distribution footprint of its parent SBI (24k+ branches), improving protection share (1QFY21: 12.6%, +137bps YoY), lowest operating cost ratios (1QFY21: 10.1%). We expect SBILIFE to deliver healthy FY20-23E VNB CAGR of 6.6% and RoEVs of ~13.4-15.4% over FY21-23E.
Outlook
We retain our BUY rating on SBILIFE with an unchanged TP of Rs 975 (Mar-21E EV + 28.9x Mar-22E VNB). The stock is currently trading at FY21/22E P/EV of 2.8/2.5x and P/VNB of 31.2/25.1x. Lower growth, renewals, and protection share are key risks.
SBI Life Insurance 21072020-hdfc
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