SBI Life Insurance - Q2FY21 Results - Angel Broking

Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

SBI Life reported a good set of numbers for Q2FY21, growth coming back, flat VNB YoY and improvement in operating efficiency continues. however, Margin ted below expectations. New Business premium (NBP) grew at 15.1% YOY for 1HFY21. APE declined by 3.6% YoY due to a 15.3% decline in individual savings business and declined 15% for 1HFY21.

VNB margins improved by ~30bps YoY (10bps QoQ) to ~18.8%, which is lower than expected. Minimal improvement in VNB Margin is primarily led by the protection business. However, a higher contribution from ULIP might limit further upside in 2HFY21. Operating efficiency is best among all listed players, and it continues to improve. During the quarter participating business saw subdued growth, this could be due to lower interest rates. SBI Life currently trades at 2.6x of Q2FY21 Embedded Value (EV), which we believe reasonable considering the gradual improvement in margin profile and benefit of bancassurance for Business growth from SBI.

Shares of SBI Life Insurance Company Ltd was last trading in BSE at Rs.778.75 as compared to the previous close of Rs. 770.3. The total number of shares traded during the day was 54462 in over 3346 trades.

The stock hit an intraday high of Rs. 784.95 and intraday low of 765.3. The net turnover during the day was Rs. 42317281.

Source : Equity Bulls

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