JM Financial has a Buy on SBI Life, revises target price to Rs 1,700

JM Financial has a buy call on SBI Life Insurance Company with a target price of Rs 1,700 (Rs 2,000 earlier). The current market price of SBI Life Insurance Company is Rs 1429.8. SBI Life, incorporated in 2000, is a Large Cap company with a market cap of Rs 143328.79 crore, operating in the Financial Services sector.

SBI Life Insurance Company's key products/revenue Segments include Premiums Earned and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Standalone Total Income of Rs 18859.21 crore, down -53.20 % from last quarter Total Income of Rs 40297.61 crore and down -51.71 % from last year same quarter Total Income of Rs 39050.80 crore. The company has reported net profit after tax of Rs 550.82 crore in the latest quarter.

The company?s top management includes Mr.Dinesh Kumar Khara, Mr.Amit Jhingran, Mr.Ashwini Kumar Tewari, Dr.Tejendra Mohan Bhasin, Mr.Shobinder Duggal, Ms.Usha Sangwan, Mr.Narayan K Seshadri. Company has S K Patodia & Associates as its auditors. As on 31-12-2024, the company has a total of 100 Crore shares outstanding.

Investment Rational
SBI Life has seen a sustained slowdown in banca growth (61% of 9M25 individual APE ? 8.5% YoY growth in 9MFY25); however, with a focused growth strategy (agency and non-SBI banca channels), JM Financial expects it to deliver 15.2% CAGR in APE over FY25-FY27e. At CMP, the stock trades at valuations of 1.7x/1.5x FY26/FY27e EV, implying 10.4x/8.0x on VNB, after accounting for VIF (Value of In Force business) in the CMP. The brokerage believes these are inexpensive for 18% EV CAGR. With the weak aspirations for banca growth, they cut their target price to Rs 1,700 from Rs 2,000, valuing SBI Life at 1.8x FY27e EVPS of Rs 972 (down from 2.1x).

Promoter/FII Holdings
Promoters held 55.38 per cent stake in the company as of 31-Dec-2024, while FIIs owned 22.48 per cent, DIIs 17.91 per cent.