SBI Life Q1 Results Review: Motilal Oswal Maintains 'Buy' Post Inline Earnings — Check Target Price
Continued investments in agency and digital channels are expected to drive SBI Life's overall growth, supported by a recovery in the bancassurance channel, adds Motilal Oswal
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SBI Life Insurance reported 9% YoY growth in new business APE to Rs 39.7 billion (in line). VNB margin for the quarter stood at 27.4% vs our estimate of 28.5% (26.8% in Q1 FY25). Absolute VNB grew 12% YoY to Rs 10.9 billion (in-line), driven by the product mix shift toward non-linked products.
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Motilal Oswal Report
SBI Life Insurance Company Ltd. continued to report improvement in the VNB performance in Q1 FY26, aided by a shift in the product mix toward traditional products, strong growth in the protection segment, and rising attachment rates.
Going forward, sustained traction in non-linked products and further improvement in rider attachment are expected to drive VNB margin expansion.
Continued investments in agency and digital channels are expected to drive overall growth, supported by a recovery in the bancassurance channel.
We expect SBI Life to clock a CAGR of 16%/19% 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 maintain our estimates and reiterate our Buy rating on the stock with a target price of Rs 2,140 (premised on 2.2x FY27E EV).
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