Emkay Global Financial's research report on SBI Life
SBI Life logged a robust performance for FY24, with APE at Rs197bn meeting our estimate. VNB margin at 28.1% was 0.6ppt ahead of our estimate leading to VNB at Rs55.5bn beating our estimate by 3%. In an environment where peers have seen margin contraction on account of product-mix changes, acquisition cost pressure and pricing competition, SBI Life’s cost advantage and prudent pricing has resulted in limited margin contraction for the year despite it being a ULIP-heavy player. Management continues to offer products based on customer demand, and expects the company to grow above the industry, while margins are expected to improve with focus on Non-Par savings and protection. To reflect the Q4FY24 developments, we tweak our FY25-26 estimates which results in a ~1% increase in our APE forecast and a 1ppt mark-up in our margin estimate, leading to a ~2-4% lift to our VNB.
Outlook
We introduce FY27 estimates. We reiterate our BUY rating on the stock, with unchanged Mar-25E TP of Rs1,800/share (implying FY26E P/EV of 2.2x).
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