SBI Life Insurance Company Ltd. share price target

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%)

Net premium growth continued at a healthy pace of 29.2% YoY to | 6776 crore, led by 37.6% YoY growth in individual new business premium (NBP) and 31.6% YoY in renewals. Individual business NBP APE at 42.9% YoY led by unit linked business Healthy AUM growth at 23% YoY to | 111630 crore and better yields led to higher than estimated income from investment at | 2794 crore Opex grew 18.4% YoY to | 752 crore. Higher topline growth led to improvement in opex ratio to 11.03% vs 12.07% in Q3FY17...

We maintain BUY with a TP of Rs 840 (FY20 EV+ 26x FY20E VNB). SBI Lifes 3QFY18 was a strong quarter on both on growth and margins. Higher Interest rate, product mix drove its 9MFY18 margin to 16% (FY17 15.4%). APE growth was strong at 42.2% despite higher base of 3QFY17.

SBI Life Insurance: Unparalleled distribution network, leadership in New Business Premium (NBP) among private insurers; Interglobe Aviation: Best placed to capitalize on domestic passenger traffic growth, Endurnace technologies: ETL is the best way to play 2-Wheelers in India.

In a sweet spot for growth: Insurance penetration, density and protection gap indicates India is still significantly under insured; Under insured market = room for growth (~23% NBP CAGR over FY17-FY20E)

SBI Life with its unparalleled distribution network, leadership in new business premium (NBP) among private insurers, strong management team and top quartile service ratios is a proxy play to the huge opportunity in India's life insurance space.

SBI Life Insurance Company (SBI Life) was established as a JV between State Bank of India and BNPPC, an insurance subsidiary of BNP Paribas. With robust growth of 35.45% CAGR in FY15-17, SBI Life was the largest private insurer in terms of NBP gaining private market share at 20.04%. SBI Life has a big advantage due to its bancassurance with SBI, with a network of ~24000 branches. A diversified product mix and strong distribution capabilities will pave the way for faster growth, market share ahead. While focus on linked business is seen driving healthy growth in...

SBI Life Insurance Company Ltd (SBI Life) is India's largest private life insurer in terms of New Business Premium (NBP) generated as on FY17, with an overall market share of 20%. The company has a wide distribution network consisting of bancassurance channel which includes State Bank, 95,177 individual agents, corporate agents and brokers etc. SBI Life's NBP and PAT has grown at a CAGR of 35.5% and 8.24% respectively over FY15-17. Over the years the company has been continuously focusing on customer satisfaction, its death claims...