KR Choksey's research report on SBI Life Insurance
GWP rose 71% QoQ/lower by 28% YoY on better new business and improved persistency. 13th and 61st month persistency rose 10bps YoY and 340 bps YoY respectively. The persistency was at 85.9% and • 60.9% respectively. Value of new business rose 20% YoY/24% QoQ. The VNB margin rose 70 bps YoY/10 bps QoQ. SBI Life reported PAT of INR 300 Cr. up by 131% QoQ. Solvency ratio improved to 245% up 2500 bps YoY/600 bps QoQ.
Outlook
We apply a 2.8x P/EV on FY21E EVPS of INR 357 and a VNB multiple of 29x on FY21E to arrive at a weighted average TP of INR 996 per share for SBI Life (50:50 weights on the P-EV and appraisal value methodology); indicating a 29% upside to CMP. We reiterate a “BUY” on the shares of SBI Life.
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