SBI Life Insurance Q1 Review: Analysts Retain Positive View Post Strong Results
SBI Life Insurance is Morgan Stanley's preferred large-cap stock
Analysts maintained a positive outlook on SBI Life Insurance Company after it delivered stronger-than-expected performance for the April-June quarter, with robust value of new business growth and an overall healthy uptick in performance. Jefferies hiked the target price for the counter to Rs 2,180 apiece, implying a 21% upside from current levels.
SBI Life Q1 FY26 Highlights (Consolidated, YoY)
Net premium income up by 13.7% to Rs 17,179 crore versus Rs 15,105 crore.
Net profit up 14.4% at Rs 594 crore versus Rs 520 crore.
The value of new business growth advanced 12% on the year to Rs 1,090 crore, which is slightly higher than Macquarie's estimates. Higher VNB margins aided the growth. The first-quarter VNB margin advanced 60 basis points on the year.
Management expects a 26–28% VNB margin, Macquarie said. The brokerage has a 'Neutral' rating with a target price of Rs 1,720, which implies a 5.3% downside from Thursday's close, Macquarie said.
SBI Life Insurance reported a modest 9% growth in annual premium equivalent, reflecting a relatively sluggish performance. Higher growth in group protection got offset by weaker growth in Unit Linked Insurance Plan and group savings, Jefferies said. Bancassurance witnessed a stable growth of 7% in the first quarter, while agency growth moderated to 0%.
Jefferies maintained its ‘Buy’ rating on the stock, adjusting its estimates to account for slower premium growth. The brokerage noted that margins could improve, supported by a higher contribution from enhanced rider attachments.
Stability in regulations and access to bancassurance contributions are positive for SBI Life Insurance Co. Jefferies expects a 15% compound annual growth rate in VNB in financial year 2025–28 and Return on Embedded Value of 17% in financial year 2026.
SBI Life Insurance remains Morgan Stanley’s top pick among large-cap non-bank financials, which cited its attractive risk-reward profile and limited downside relative to peers.
Morgan Stanley maintained an 'Overweight' rating with a target price of Rs 2,115, implying a 16.4% upside from Thursday's close price.
