Buy SBI Life; target of Rs 1560: Emkay Global Financial

Emkay Global Financial's research report on SBI Life

SBI Life reported a decent set of numbers in Q1FY24, with VNB of Rs8.72bn (-1% YoY; Emkay: Rs8.6bn) coming in line with our estimate, driven by slight miss on APE at Rs30.3bn (+4% YoY; Emkay: Rs30.9bn) and a minor beat on VNB margin at 28.8% (-1.4ppts YoY; Emkay: 28%). Operating assumption changes (FY23 vs FY22) partly offset the margin decline on account of the 9ppt YoY sharp decline in non-par savings in the product mix and the YoY decline in interest rates. Overall, Company continues to keep its business strategy simple by capitalizing on its brand, distribution and cost advantage as well as delivering growth and margins led by the product mix, as per customer/distributor demand.

Outlook

We marginally increase FY24-26E APE growth, while keeping margin estimates unchanged and reiterate our BUY rating, with Jun-24E TP of Rs1,560/share (FY25E P/EV: 2.4x).