SBI Life Insurance Sees Target Price of Rs 2200, Says Prabhudas Lilladher
SBI Life Insurance Company Sees 13% YoY Growth in FY26
SBI Life Insurance Company has reported a 5% year-over-year (YoY) growth in Annual Premium Equivalent (APE) for the fourth quarter of FY26, driven by an increase in Premium Annuity and Retail Protection sales. On a full-year basis, the company registered a 13% YoY growth, with expectations of maintaining a similar growth trajectory over FY27-FY28E, in line with its guidance.
The company's Value of New Business (VNB) margin contracted to 28.4% in Q4FY26 and 27.5% for the full fiscal year, primarily due to the Goods and Services Tax (GST) exemption. However, we anticipate a gradual improvement in the VNB margin to 27.6% and 27.7% for FY27 and FY28E, respectively, as the negative impact of GST exemption diminishes and the company diversifies its product portfolio away from Unit Linked Insurance Plans (ULIP).
| Company | Q4FY26 APE Growth (YoY) | FY26 APE Growth (YoY) |
|---|---|---|
| SBI Life Insurance Company | 5% | 13% |
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We have revised our estimate for SBI Life Insurance Company's multiple to 2.0x (vs. 2.5x earlier) and have valued the company using the Appraisal Value framework, with a target price of INR 2,200. Based on the company's healthy APE growth and margin outlook over FY26-28E, we have upgraded our recommendation to 'BUY'.
Investor Takeaway
Upgrade to 'BUY' on healthy APE growth and margin outlook over FY26-28E.
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