Q1FY24 Preview: SBI Life Insurance Company: New business premium seen at Rs. 62.1 billion, VNB margin at 31.0%

21 Jul 2023 , 03:30 PM

Result date: 25^th July, 2023

Recommendation: Buy

Target price: Rs. 1,750

SBI Life Insurance Company (SBI Life) could post 11% year-on-year growth in new business premium, though total APE could grow at a moderate pace of 3%, believe analysts at IIFL Capital Services. Pick up in momentum from the Banca channel will be a key positive.

The VNB growth of 5% YoY, aided by 60 basis points margin improvement. Lower share of high-margin non-par products in the product mix could be a key margin headwind. Company is likely to maintain its cost leadership in the life insurance sector.

Important management insights to watch out for:

• Commentary on growth outlook
• Outlook on VNB margin

Rs. Billion	June 2023 estimates	YoY change
New business premium	62.1	11.0%
Renewal premium	66.0	14.6%
Total APE	29.9	3.2%
Savings APE	26.8	3.7%
Protection APE	3.2	(1.0)%
VNB	9.3	5.3%
VNB Margin	31.0%	60 bps

Source: IIFL Research