SBI Life Q3 Results Review  — Moderate Growth; Margins Holding Well; 'Hold' The Stock Says Nirmal Bang

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Nirmal Bang Report

SBI Life Insurance Company Ltd.'s Q3 FY25 annual premium equivalent grew 13% YoY led by strong growth in the unit linked insurance plan and protection portfolio. The company expects FY25 APE growth to range between ~10-11% (similar to 9M FY25); we build the same.

Q3 VNB margin stood at 26.9%; we expect VNB margin to trend ~27% with a pick-up in pure protection/ non-performing asset in Q4.

We revise our FY25/ FY26 APE estimates on lukewarm growth in 9M and tempered run-rate for the banca business. Increase VNB margin estimates factoring in the pick-up in pure protection and NPAR.

We value SBI Life using the Appraisal Value framework (FY25E EV + FY26E Structural Value) with a target price of Rs 1,700 (2.1 times FY26 P/EV). Maintain Hold.

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