SBI Life Insurance Company Ltd. share price target

SBI Life Insurance Company Limited, is a joint venture between SBI and BNP Paribas formed in 2001, which offers individual and group insurance plans, including traditional and unit linked plans. Its products cover life, health,...

We maintain a Buy with a target price of Rs 1076 (2.6xFY23E EV).

SBI Life Insurance reported a mixed performance wherein premium accretion was healthy but higher actuarial liability offset investment income, led to lower than expected surplus and earnings. AUM growth accelerated 28% YoY to | 209500 crore. Shareholders and policyholders (excluding linked liabilities) assets witnessed healthy growth at ~24% and ~21% YoY, respectively. Recovery in equity market and decline in yields led to strong investment income at | 12777 crore (up 213% YoY) in Q3FY21, supporting total revenue trajectory. Commission expenses...

SBI Life delivered a 7% de-growth in APE on 9MFY21 basis v/s 14% de-growth in H1FY21 on back of 13% NBP YoY. Margins also improved by 50bps to 19.3% from H1 to 9M mainly on higher share of non-PAR especially led by individual protection. Although, in our view, despite mix change & decent volumes margin improvement was slightly slow, offset by faster recovery in ULIPs. Looking from 9MFY21 we increase our estimates with 3% APE growth and margin tailwind from (i) conservative operating assumptions (ii) repricing of certain products especially protection which could see volumepricing impact and (iii) improving growth, helping deliver closer to 20% VNB margins and 19% growth in ROEV for FY21 with tailwinds of same continuing...

SBILIFE posted a rebound in business premium with individual APE growing at 14% YoY in Oct'20 after reporting a consecutive decline for the past many months. During 2QFY21, the ULIP business declined 13% YoY but grew 166% QoQ from the troughs seen earlier. Protection growth remains robust both in individual and group segments and is expected it to remain strong. The revival in credit growth, with parent SBIN indicating that the retail disbursement run-rate is now higher than pre-COVID levels, further augurs well for SBILIFE. The company reported an improvement in persistency rate across cohorts, with...

The company has posted 27% growth in net premium collection to Rs 12857.95 crore in Q2FY2021, aided by 28% growth in the renewal business to Rs 7150 crore, while new business premium also jumped 27% to Rs 5940 crore in Q2FY2021. New Business APE eased 4% to Rs 2710 crore in Q2FY2021 from Rs 2810 crore in Q2FY2020. The Value of New Business (VoNB) fell 2% to Rs 510 crore in Q2FY2021, while VoNB margins...

SBI Life Insurance reported a healthy set of numbers led by strong renewal premium and investment income. Higher actuarial liability and elevated claims were offset by steady opex, which led to reasonable PAT growth. Healthy NBP accretion led to elevated commission expenses at | 414 crore, up 1.5% YoY, 83.9% QoQ. Elevated commissions despite higher sourcing via banks (banca + others) were at ~87%. Higher commission expenses were offset by steady opex, leading to overall opex to come in at | 1003 crore vs. | 1014 crore in Q2FY20. Strong premium growth coupled with...

We remain positive on the stock and maintain Buy with a Target Price of Rs 998 (2.8x FY22EV)

Strong recovery in GWP led by protection & group savings SBI Life delivered 28% YoY growth in GWP mainly from renewal & single premium, while some recovery in regular premiums. This has led to APE recovery with de-growth of -4%/-15% YoY in Q2/H1FY21 vis--vis -32% YoY de-growth in Q1FY21. New business was driven by group savings, protection and recovery in ULIP. This change in business mix kept the margins steady at 18.8% (PLe of 19.6%) as recovery in ULIP offset the protection margin benefit. Improving protection mix and other higher margin products will help...

SBILIFE reported a 28% YoY increase in GWP to Rs. 130.9bn in Q2FY21 driven by strong renewal premium and single premium, which grew 28% and 71% respectively to Rs 71.5bn and Rs 36.2bn. APE declined 3.5% YoY to Rs. 27.1bn but more than doubled sequentially. The savings APE declined 9.2% to Rs. 23.7bn while the protection APE grew 70% to Rs. 3.4bn. We expect SBILIFE's APE growth to be on par with the industry's. Individual savings APE declined 15% YoY to Rs. 21.1bn and comprise of 78% of the overall mix (Q2FY20: 88% Q1FY21: 75%). Although ULIP APE...