SBI Life reported an impressive performance for Q4FY25/FY25 with VNB margin at 30.5%/27.8%, respectively, clocking in 7.2% VNB growth for FY25. While APE remained largely in-line, the strong margin delivery for Q4FY25 was driven by 1) lower share of ULIPs, 2) increased share of Non-Par and Protection products (led by higher term and rider attachments), and 3) lower share of Group Savings business. Ahead, the management will continue to focus on the agency channel for distribution, and targets ~20-25% Retail APE growth; at the company level, Retail APE growth guidance is 13-14% for FY26. Lower contribution from ULIPs, offset by higher share of Par products, will keep margin stable at ~28%. To bake in the Q4 developments, we increase our APE and VNB margin which results in ~2% increase in FY26-27E VNB.
OutlookWe reiterate BUY and revise up our Mar-26E TP by 5.4% to Rs 1,950 (from Rs1,850 earlier), implying 2.0x FY27E P/EV.
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