Q2FY23 Preview: SBI Life Insurance Company: Total APE seen at Rs37.3 billion, VNB margin at 28.0%

20 Oct 2022 , 07:43 AM

Result date: 21^st October, 2022
Recommendation: Buy
Target price: Rs1,670

SBI Life Insurance Company (SBI Life) is likely to witness healthy growth in new business premium as well as renewal premium. Total APE though could decline 6% over the year-ago quarter.

SBI Life’s geographical reach and distribution muscle will aid in driving growth. Share of protection products could improve and that of Non-PAR could stay steady, amid uptick in ULIPs.

The company continues to enjoy cost leadership among peers. Its VNB should inch up by 1%. VNB margin could increase 210 basis points, amid continued traction in the company’s guaranteed offerings.

Important management insights to watch out for:

• Demand trends across sections
• Market share movement during the quarter
• Margin outlook

Rs. Billion	September 2022 estimates	YoY change
New Business Premium	75.0	8.0%
Renewal Premium	89.4	15.0%
Total APE	37.3	(6.4)%
Savings APE	33.2	(7.1)%
Protection APE	4.1	0.0%
VNB	10.4	1.3%
VNB Margin	28.0%	210 basis points

Source: Company, IIFL Research