SBILIFE reported a mixed 3QFY23. APE grew 19% YoY (7% beat), whereas VNB margins contracted 374bp QoQ to 27.8% due to higher growth in ULIP. Shareholders’ PAT declined 16% YoY to INR3.0b (29% miss). Among segments, Annuity saw a healthy growth of 17% YoY, while Non-Par savings grew 75% YoY in 3QFY23. Growth in the Protection business was modest at 10% YoY, while the ULIP business saw healthy sequential growth. We lower our VNB margin estimates by 160-170bp for FY23-25 and expect VNB margins to remain at ~30% in FY25. We expect SBILIFE to deliver a 25% CAGR in APE over FY22-25, thus enabling a 32% VNB CAGR. RoEV is expected to stay around ~20-22%. Maintain Buy.
OutlookWe maintain our Buy rating with a TP of INR1,570 (2.5x Sep’24E EV).
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