SBI Life Insurance Company Ltd. share price target

Maintain BUY with a marginally increased TP of Rs 750 (FY20 EV + 16.7x FY21 VNB). Driven by protection business (NBP Rs 4.8bn, +220.0% YoY), SBI Lifes 3QFY19 total NBP grew 34.6% YoY to Rs 39.2bn. Total APE at Rs 28.9bn grew 17.2% YoY, an improvement from 14.2% seen in 2QFY19. Protection business share on APE basis improved to 7.3% (198bps YoY) as the companys focus on individual protection (through its parent SBI) resulted in a 10x YoY/+37.5% QoQ growth in individual protection business to Rs 1.1bn.

SBI Life Insurance Company Ltd Q2FY19 results Comment Operating Income increased by 61.14% to Rs. 7661.55 Cr in Q2FY19 when compared to the previous quarter. Also, it grew by 42.29% when compared with Q2FY18.

Maintain BUY with a TP of Rs 735 (Avg FY20-21E EV + 20.8x avg FY20-21E VNB). Driven by protection business (NBP Rs 3.7bn, +164.2% YoY), SBI Lifes 2QFY19 total NBP grew 39.8% YoY to Rs 34.8bn. APE growth was lower at 14.2% YoY to Rs 23.9bn given change in structure of credit protect product from (regular to single premium). Protection business growth was stellar in both individual and group segments- 256/127% YoY respectively and its share on APE basis improved to 5.9% vs. 4.5% in 1QFY19. Consequently, co reported VNB margin expansion of 20bps for 1HFY19 to 19.2%

Robust growth in premium continued at 40% YoY to | 7622 crore, led by 40% YoY growth in new business and 41% YoY in renewals. Traction in individual business remained at ~13.9% YoY to | 2409 crore, while group business witnessed higher growth at 4x YoY to | 1294 crore. Protection business (individual+group) witnessed robust traction of 171% YoY to | 380 crore; ~10.5% of NBP. Such higher growth in segments led to 40% YoY growth in NBP to | 3497 crore On APE (annualised premium equivalent) basis, NBP APE increased...

We maintain BUY with a TP of Rs 846 (FY20 EV + 27.3x FY20E VNB). SBI Lifes 1QFY19 total APE grew just 2.1% YoY to Rs 13.1bn. Growth was lower also due to the high base in 1QFY18 where APEs grew 50%+. Protection share on APE basis reduced to just 4.6% (-480 bps YoY and -80bps vs. FY18) partly as a result of move to single premium credit life policies and partly as a result of lower (-63% YoY) group term business. For 1QFY19 SBILIFE for the first time reported tax rate adj. VNB margins at 19.0%.

ICICI Securities Ltd | Retail Equity Research Premium growth continued to remain healthy at 26% YoY to | 4755 crore in Q1FY19, led by 15% YoY growth in new business and 35% YoY in renewals. Protection business (individual + group) witnessed robust traction of 107% YoY to | 210 crore forming ~10% of NBP. Individual NBP growth remained at ~8% YoY, owing to base effect AUM growth was healthy at 18.8% YoY to | 120280 crore Opex grew 22% YoY to | 655 crore. Higher topline growth led to ~50...

Premium growth continued to remain healthy at 21% YoY to | 25350 crore in FY18 (| 9237 crore in Q4FY18), led by 30% YoY growth in individual new business and 31% YoY in renewals. Protection...

We maintain BUY with a TP of Rs 810 (FY20 EV+ 25x FY20E VNB). While SBI Lifes Total APE for FY18 grew 26.9% YoY, 4QFY18 Total APE growth was muted at 6.3% YoY largely due to the high base in 4QFY17. VNB Margins for the year expanded 80bps to 16.2% for FY18. Margin increase was despite a negative experience in mortality, and was driven by better product mix, positive experience in persistency, and lower acquisition costs.

Q3 was strong on robust 38.2% YoY growth in Individual Rated Premium (IRP; market share further up to 13% vs. 11.2% in FY17), improvement in persistency ratio (in majority of buckets), gradual uptick in Value of New Business margin (VNB margin; up 40 bps QoQ to 16%)