Motilal Oswal Maintains Buy Recommendation for SBI Life Insurance, Targets Rs 2350

SBI Life Insurance Reports 6% YoY Growth in New Business APE

SBI Life Insurance (SBILIFE) has released its recent performance metrics, revealing a 6% year-over-year (YoY) growth in new business Annual Premium Equivalent (APE) to INR57.5 billion, which aligns with market expectations. This growth trend continued throughout the fiscal year, with APE increasing by 13% YoY to INR242.7 billion for FY26.

The company's Value of New Business (VNB) also showed a decline of 2% YoY to INR16.3 billion, resulting in a VNB margin of 28.3% for the quarter, compared to 30.5% in 4QFY25. However, this decline is in line with market expectations. For the fiscal year FY26, VNB grew by 12% YoY to INR66.7 billion, with a VNB margin of 27.5%, which is at the upper end of the company's guidance of 26-28%.

Outlook and Revised Estimates

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Motilal Oswal's research team has revised its estimates for SBI Life Insurance, expecting a 2% decline in Value of New Business to Enterprise Value (VNB/EV) estimates for both FY27 and FY28, while maintaining an expected Compound Annual Growth Rate (CAGR) of 14% over FY26-28E. The operating Return on Embedded Value (RoEV) is expected to remain stable at 18%.

Revised Recommendation

Based on these revised estimates, Motilal Oswal has reiterating its BUY rating for SBI Life Insurance with a revised Target Price (TP) of INR2,350, calculated based on a Price-to-Embedded Value (P/EV) ratio of 2.1x for FY28E.