Buy SBI Life Insurance, target price Rs 1250: Motilal Oswal

Motilal Oswal has buy call on SBI Life with a target price of Rs 1250. The current market price of SBI Life Insurance Company is Rs 1063.65. Time period given by analyst is one year 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 107680.66 Crore) operating in Financial Services sector.

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
SBI LIFE reported a steady quarter, with VNB growing at a robust pace, led by an improving product mix and margin expansion – despite overall new business growth being relatively modest against a benign base. SBILIFE continues to maintain its cost leadership, while persistency trends have improved on a YoY basis. VNB margins have shown steady improvement and are estimated to reach 25.4% by FY23 – thus enabling a 23% VNB CAGR and a ~17% EV CAGR over FY21–23E.

Promoter/FII Holdings
Promoters held 55.7 per cent stake in the company as of June 30, 2021, while FIIs held 27.2 per cent, DIIs 9.6 per cent and public and others 7.4 per cent.