SBI Life Insurance Company Ltd. share price target

We recommend a BUY rating on the stock with a target price of Rs 1,609/ share, implying an upside of 10% from the CMP.

We maintain our BUY recommendation on the stock

Strong APE growth YoY while margins contract in 9M on shift towards ULIP mix and new surrender guidelines

The Gross Written Premium (GWP) for Q3FY25 stood at INR 249,978 Mn, a growth of 11.3% YoY (+22.5% QoQ), primarily led by the renewal premium. GWP was 1.9% lower than our estimates.

We upgrade SBI Life to BUY from Add with revised up Dec-25E TP of Rs1,850, implying FY26E P/EV of 2.3x. SBI Life delivered an impressive performance in Q3FY25 with growth rebound in the banca channel (10% YoY in Q3 vs 7% in H1), which led to Retail APE growth of 13% in Q3 on a strong base of last year, and VNB margins for the quarter coming in at 26.95% vs 26.86% of 9M despite implementation of the new surrender regulations.

SBI Life Insurance (SBILIFE) reported strong performance in 3QFY25. APE grew 13% YoY to INR69.4b (5% beat). For 9MFY25, it grew 11% YoY to INR159.7b

The Gross Written Premium (GWP) for Q2FY25 stood at INR 204,132 Mn, a growth of 1.2% YoY (+31.1% QoQ), primarily led by a 15.8% YoY growth in the renewal premium. GWP missed our estimates.

SBI Life Insurance reported premium income lower than our estimates by 6% mainly due to weakness in the group insurance and muted growth in the bancassurance channel. In terms of APE, growth was muted at 3% YoY, lower than our estimates by 4%.

SBI Life Insurance (SBILIFE) reported a weak performance in 2QFY25. APE grew 3% YoY to INR53.9b (11% miss). For 1HFY25, it grew 9% YoY to INR90.3b.

The Gross Written Premium (GWP) for Q1FY25 stood at INR 155,721 Mn, a growth of 14.9% (-38.3% QoQ), primarily led by a 16.2% YoY growth in the renewal premium. GWP was in line with our estimates.

We maintain our BUY recommendation on the stock.

We remain constructive on SBI Life Insurance (SBLI) basis strength in its distribution and cost structure. While these business moats remain extremely relevant, the wide customer base also makes SBLI least vulnerable to regulatory changes.

SBI Life Insurance (SBILIFE) reported a decent performance in 1QFY25. APE grew 20% YoY (in line) to INR36.4b, whereas absolute VNB grew 11.5% YoY.

SBI Life delivered a largely in-line performance during Q1FY25, with APE at Rs36.4bn (+20% YoY) vs. our estimate of Rs35.8bn and VNB margin at 26.8% (Emkay: 27.2%).

The Gross Written Premium (GWP) for Q4FY24 stood at INR 252,411 Mn, a growth of 26.1%/ 12.4% QoQ, primarily led by surge in the New Business Premium (NBP). GWP was 5.5% higher than our estimates because a single premium segment performed better than expected.

SBI Life Insurance (SBLI) maintains its sectoral outperformance in FY24 basis volume growth (17%), VNB growth (9%), core RoEV (21.8%) as well as overall RoEV (26%).

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%.