Buy SBI Life Insurance Company; target of Rs 991: Prabhudas Lilladher
Prabhudas Lilladher’s research report on SBI Life Insurance Company
SBI Life’s NBP continued to grow strong at 40% YoY in H1FY19 with APE growth of 26% on very strong growth from Non-PAR but despite which, was slower than Q1FY20 on ULIP and PAR (saw de-growth). Protection business continued to grow well with 1x growth YoY with higher individual protection business. Margins continued to improve with 80-90bps ending at 18.1% on back of mix change towards high margin products like Annuities & Protection. Profitability was slightly impacted on higher future fund appropriations and investment provisions on stressed assets.
Overall operating metrics have been improving while growth remains better in industry, while margins have an upward bias of 100bps improvement each year. Retain BUY with revised TP of Rs991 (from Rs906) based on Sep-21 2.9x P/EV (rolled over from Mar-21).
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