KR Choksey's research report on SBI Life Insurance
Gross Written Premium (GWP) grew by 14.3% YoY/ 3.5% QoQ to INR 2,00,136 Mn in Q4FY23, mainly driven by 10.1% YoY/9.4% QoQ growth in renewal premium. Value of New Business (VNB) declined by 2.3% YoY/ 4.6% QoQ to INR 14.4 Bn in Q4FY23 with margins at 31.6%. Profit after Tax (PAT) stood at INR 7,769 Mn in Q4FY23, a growth of 15.6% YoY/ 157.7% QoQ. The solvency ratio as of March 31, 2023, stood at 2.15x as against the regulatory requirement of 1.50x. AUM grew by 14.9% YoY/ 2.5% QoQ to INR 3,073 Bn as of March 31, 2023. Embedded value stood at INR 460.4 Bn for FY23.
Outlook
We continue to apply a 2.5x P/EV on FY25E EVPS of INR 651.8 and a VNB multiple of 13.4x to arrive at a weighted average TP of INR 1,630 per share (earlier INR 1,750) for SBI Life (50:50 weights on the P-EV and appraisal value methodology); implying a potential upside of 42.9% from the CMP. Accordingly, we maintain our rating as "BUY" on the shares of SBILIFE.
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