Time period given by analyst is six months when SBI Life Insurance Company Ltd. price can reach defined target.
SBI Life Insurance Company Ltd., incorporated in the year 2000, is a Large Cap company (having a market cap of Rs 117407.07 Crore) operating in Financial Services sector.
SBI Life Insurance Company Ltd. key Products/Revenue Segments include Amount transferred from Policyholder Account, Interest, Dividend & Rent and Profit/Loss on Sale/Redemption of Investments for the year ending 31-Mar-2020.
Financials
For the quarter ended 30-06-2021, the company reported a Standalone Total Income of Rs 243.50 Crore, down -83.17 % from last quarter Total Income of Rs 1446.43 Crore and down -35.70 % from last year same quarter Total Income of Rs 378.67 Crore. Company reported net profit after tax of Rs 223.16 Crore in latest quarter.
Investment Rationale
Even during the weak economic scenario, the company has reported decent numbers in Q1FY22. SBIL deserves premium valuation given diversified product mix, strong distribution and focus on improving persistency. The brokerage has estimated SBI life to deliver CAGR of 20% for Value of New Business (VNB), 16% New Business Premium (NBP) and 16% for Embedded Value (EV) over FY21 to FY23E. The company is trading at 2.5x FY23 Embedded Value, which is at sharp discount to its peer HDFC Life. Given the high growth environment it believes that Indian life insurance companies will be keep on getting higher multiples. SBI Life offers quality at attractive valuations due to its best-in-class cost ratio, improving persistency and strong premium growth that ensures continuity in sound operating performance. Its margin has expanded in FY22 but it still lags peers and therefore has a high room for improvement over the next two years.
Promoter/FII Holdings
Promoters held 60.7 per cent stake in the company as of Sept 30, 2020, while FIIs held 25.8 per cent, DIIs 7.1 per cent and public and others 6.5 per cent.
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