SBI Life Insurance Q3 Results Review - VNB Above Estimates; Margins Contract 40bp YoY: Motilal Oswal

Motilal Oswal Report

SBI Life Insurance Company Ltd.'s reported decent performance in Q3 FY24. Annual Premium Equivalent grew 13% YoY (22% beat), while Value of new business grew 11% YoY as margins contracted 40 bp YoY to 27.4%. profit after tax grew 6% YoY to Rs 3.2 billion (versus our estimate of Rs 4.0 billion, registering 20% miss).

In terms of New Business Premium, Group Savings and Unit Linked Insurance Plan witnessed a healthy YoY growth of 54% and 16%, respectively, while Par savings declined 17% YoY in Q3FY24. The protection business was flat YoY.

We expect SBI Life Insurance to deliver 18% compound annual gowth rate in APE over FY23-26E, thus enabling a 16.4% VNB CAGR. RoEV is expected to stay at around ~20%. We reiterate our 'Buy' rating on the stock with a target price of Rs 1,700 (2.3 times September 26E enterprice ).

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