Buy SBI Life Insurance, target price Rs 1615: Emkay Global

Emkay Global has buy call on SBI Life Insurance Company with a target price of Rs 1615. The current market price of SBI Life Insurance Company is Rs 1127.6. Time period given by analyst is 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 113146.91 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-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 20681.58 Crore, down -19.36 % from last quarter Total Income of Rs 25646.26 Crore and down -22.62 % from last year same quarter Total Income of Rs 26727.95 Crore. Company reported net profit after tax of Rs 364.06 Crore in latest quarter.

Investment Rationale
RWRP growth for SBILIFE was 3.6% YoY in Mar’22, leading to 25.9% YoY growth in RWRP in FY22. But this low RWRP growth comes on an exceptionally stronger Mar’21 base when the RWRP had grown >2x YoY on a weaker Mar’20 base. On a 2-year CAGR basis, SBILIFE’s RWRP growth of ~15% was slightly better than the private sector average. In Mar’22, the company sold its highest-ever monthly individual policy count of 265K, up 13% YoY. The higher policy count growth and lower RWRP growth indicate the company’s focus on retail protection over saving products in the last few months. This product mix change could drive some positive surprises in VNB margins. The overall development of FY22 highlights SBILIFE’s powerful brand, distribution strength and consistent product strategy. With all its distribution engines firing and the company having relative immunity against the reinsurance price hikes in protection, SBILIFE is well-positioned to deliver strong, profitable growth in the coming years.

Promoter/FII Holdings
Promoters held 55.48 per cent stake in the company as of 31-Mar-2022, while FIIs owned 24.15 per cent, DIIs 12.46 per cent.