Q2FY24 Preview: SBI Life Insurance Company: New business premium seen at Rs. 104 billion, VNB margin at 29.0%

26 Oct 2023 , 09:41 AM

Result date: October 27, 2023

Recommendation: Buy

Target price: Rs. 1,800

SBI Life Insurance Company is expected to record industry-beating growth of 33% in Annualized Premium Equivalent (APE), but Value of New Business growth of only 22% over the year-ago quarter; led by a 250 basis points margin decline. Analysts at IIFL Capital Services believe that Q2-Q3 will see sharp acceleration for SBI Life, which is playing out now. They expect margins to remain range bound for the fiscal year 2023-24.

SBI Life’s geographical reach and distribution muscle will aid in driving growth. The company is likely to retain its cost leadership.

Important management insights to watch out for:

• Growth outlook across markets
• Share of protection mix, Non-PAR 

Rs. Billion	September 2023 estimates	YoY change
New business premium	104.0	38.8%
Renewal premium	104.6	14.6%
Total APE	52.2	32.8%
Savings APE	46.2	32.7%
Protection APE	6.0	33.3%
VNB	15.1	22.1%
VNB Margin (%)	29.0%	(250) bps

Source: IIFL Research