Q3FY24 Preview: SBI Life Insurance Company: Total APE seen at Rs. 97.4 Billion, VNB at Rs. 17.1 Billion

24 Jan 2024 , 03:20 AM

Result date: January 25, 2023

Recommendation: Buy                  

Target price: Rs. 1,870    

Analysts at IIFL Capital Services believe SBI Life Insurance Company (SBI Life) could post industry-beating growth of 12% in annual premium equivalent (APE) over the year-ago quarter, and Value of New Business (VNB) growth of 13%, led by a 20 basis points expansion in margin over the year-ago quarter. 

SBI Life has a resilient customer base, strong distribution franchise and low-cost structure; and could be the least impacted from regulatory changes. The company’s geographical reach and distribution muscle will aid in driving growth, believe analysts at IIFL Capital Services.

Important management insights to watch out for:

• VNB margin outlook 
• Growth across product lines
• Any change in product mix
• Impact of IRDA proposals on surrender penalty caps

Rs. Billion	December 2023 estimates	YoY change
New business premium	97.4	15.7%
Renewal premium	125.0	14.6%
Total APE	60.9	12.2%
Savings APE	53.3	7.3%
Protection APE	7.6	65.6%
VNB	17.1	13.0%
VNB margin (%)	28.0%	20 bps

Source: IIFL Research