SBI Life Insurance has seen a dip in its share price, falling by around 4% after brokerages shared their outlook on the company’s Q2 FY25 performance. The company posted modest growth in net premium income, but concerns over weak APE (Annualized Premium Equivalent) growth and revised guidance have tempered expectations.
Brokerage Views:
- HSBC: HSBC maintained a “Buy” rating on SBI Life, setting a target price of ₹1,940, indicating a 13.3% upside from the current market price (CMP) of ₹1,711.70. The brokerage expects new product launches, focusing on pure protection, to impact growth positively from Q3 onwards.
- Macquarie: Macquarie maintained an “Outperform” rating with a target price of ₹1,830, suggesting a 7% upside from the CMP. While the brokerage acknowledged that Q2 VNB (Value of New Business) was in line, it noted that the high base effect impacted APE growth. Macquarie cut its VNB growth guidance to 12-15% for FY25, but highlighted that inexpensive valuations could lead to outperformance.
Financial Performance:
- Net Premium Income: SBI Life recorded a 1% year-on-year (YoY) increase in net premium income, reaching ₹20,266 crore during the July-September 2024 period.
- First-Year Premium Income: The company’s first-year premium income grew by 6% to ₹4,915 crore, up from ₹4,633 crore a year ago.
Despite the challenges, the insurer remains well-positioned for future growth, with brokerages emphasizing the potential impact of new product launches in the coming quarters.
TOPICS:
SBI life insurance