SBI Life Q4 Results Review: Motilal Oswal Maintains 'Buy', Hikes Target Price

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Motilal Oswal Report

SBI Life Insurance Company Ltd. reported a strong VNB performance in Q4 FY25, aided by a shift in the product mix toward traditional products. Going forward, improvement in product-level margin and continued tilt toward non-linked products should drive VNB margin improvement. Continued investments in the agency channel will boost overall growth, while digital enhancements will keep costs in check.

We expect SBI Life to clock a CAGR of 15%/17% in annual premium equivalent/value of new business over FY25-27, while return on embedded value is likely to remain at ~19% over FY27.

We have slightly cut our APE estimates considering company guidance and have increased our VNB margin estimates due to an expected shift toward traditional products and improvement in product-level margins.

We reiterate our Buy rating on the stock with a target price of Rs 2,000 (premised on 2.0x FY27E EV).

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