Emkay Global Financial's research report on SBI Life
SBI Life continued its good performance in Q3FY23 and reported a good set of numbers for 9MFY23. VNB for 9MFY23 at Rs36.3bn was 3% above our estimates, driven by APE being 3% above our estimates and VNB margin at 29.6% being in line with our estimates. Retail growth bounced back in Q3 after marginal slowdown in Q2, driving the overall 20% APE growth in 9MFY23, despite a marginal YoY decline in the group savings business in 9MFY23. Banca channel saw strong growth in ULIP business in Q3, and this was the underlying reason behind the sequential softening in VNB margin. Going ahead, we expect the agency channel and protection product to press the accelerator in Q4, driving up growth and margins. We believe SBI Life is on the right track with its powerful distribution channels firing up and delivering better-than-industry growth and as its product mix and cost efficiencies are offering best-in-industry margins. We have marginally tweaked our estimates to reflect 9MFY23 developments.
Outlook
We reiterate our Buy rating on the stock with a revised TP of Rs1,680. Powered by its formidable combination of brand and distribution reach, SBI Life remains our top pick in the sector.