ICICI Securities Sees SBI Life Insurance Reaching Rs 2345

ICICI Securities Maintains Buy Rating on SBI Life Insurance

SBI Life Insurance Company has demonstrated resilience in the face of multiple challenges, achieving mid-teen growth with a healthy VNB margin of 26-28% as per its guidance. This achievement is a testament to the company's robust business model, which has enabled it to maintain its market position despite the difficulties it has faced.

The company's FY26 performance was marked by a core operating RoEV of approximately 19%, as well as higher growth in non-banca channels. Specifically, the banca, agency, and other channels reported year-over-year growth of 11%, 15.2%, and 21.9% in FY26, respectively. SBI Life's product mix also showed signs of improvement, with retail protection and annuity growing by 24% and 34% in FY26, respectively.

A comparison of SBI Life's product mix to its peers reveals a traditionally high ULIP and low protection mix, with ULIP and protection products accounting for 59.4% and 9.2% of its total APE, respectively, as of FY26. However, the company has made notable progress in improving its product mix, which is expected to have a positive impact on its overall performance.

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SBI Life's track record is also noteworthy, with APE, VNB, and EV CAGR of 15.3%, 21.8%, and 20.5%, respectively, over the period of FY20-25. Additionally, the company's valuation remains attractive, with a P/EV of 1.7x FY28E. Based on these factors, ICICI Securities maintains its constructive outlook on SBI Life Insurance.

As a result, ICICI Securities is maintaining its BUY rating on SBI Life Insurance with a revised target price of INR 2,345, based on a 2.1x FY28E EV multiple.