SBI Life Insurance Company Ltd. share price target

Given the strong distribution footprint of its parent SBI (24k+ branches), improving protection share (8.1%), lowest operating cost ratios (9.5%), improving margins (VNBM: 19.8%) and tailwinds from financialisation of savings we expect SBILIFE to deliver strong FY19-21E VNB CAGR of 15.5% p.a. and RoEVs of ~17.5-18%. Lower than expected growth and protection share remain a key risk to our call. FY19 NBP growth of 25.7%, was driven by higher share of protection (NBP: 11.9%, +643bps YoY), which in turn led to adj. VNBM expansion of 140bps to 19.8%. Consequently absolute adj. VNB grew a stellar 22.1% YoY to Rs 19.2bn. SBILIFE is our top BUY with a TP of Rs 785 (FY20 EV + 19.8x FY21E VNB).

SBI Life reported healthy growth in premium at 22.5% YoY to | 11380 crore, led by robust traction in renewals (27.7% YoY) and healthy growth in new business premium (NBP). Traction in both - individual (16% YoY) and group NBP (12% YoY) remained healthy. Focus on protection business has led to a rise in its proportion to ~12% in FY19 vs. ~6% in FY18. AUM growth...

SBI Life Insurance Company (SBIL) reported gross written premium (GWP) of Rs113.7bn (+22.5% yoy, +24.1% qoq), almost in line with our estimate, supported by annualized premium equivalent (APE) growth of 16.8% yoy to Rs30.4bn. Value of new business (VNB) margin was 17.7% (at gross-tax), 10bps below Emkay est. (+150bps yoy and +20bps ytd). Product mix boosted margins 300bps yoy, while...

Premium growth remained strong at 35% YoY to | 9141 crore, led by 39% YoY traction in renewal and healthy growth in new business premium (NBP), particularly single premium that rose 121% YoY. Traction in individual business remained healthy at ~16.8% YoY while group business witnessed higher growth at 124x YoY to | 1016 crore. Protection business witnessed robust traction of 213% YoY On an annualised premium equivalent (APE) basis, NBP APE increased 12.8% YoY to | 6600 crore for 9MFY19, led by higher...

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%.