SBI Life Insurance has seen a remarkable surge in its share price, climbing 16.47% over the past year and an impressive 21.03% since the beginning of this year. The stock reached a six-month peak on Friday, following the announcement of a consolidated net profit of ₹814 crore for the fourth quarter of the last fiscal year. Although the net premium income dipped 5% year-on-year to ₹23,861 crore, down from ₹25,116 crore, investor confidence remains strong.
UBS Maintains ‘Buy’ Rating
Despite the profit figures falling short of market expectations, UBS has reaffirmed its ‘buy’ recommendation for SBI Life Insurance, increasing the target price from ₹1,880 to ₹1,915. This adjustment reflects a better-than-anticipated valuation of new business. For the fiscal year 2025, the annualized premium equivalent witnessed a 9% year-over-year growth, while the value of new business (VNB) rose by 7%. These metrics suggest that the company is maintaining stable margins.
- Annualized Premium Equivalent Growth: 9% YoY
- Value of New Business Increase: 7%
- Target Price Raised: From ₹1,880 to ₹1,915
Key Performance Indicators
SBI Life’s solvency ratio has slightly decreased to 1.96%, down from 2.04% in the previous quarter. On a positive note, the 13th month persistency ratio improved to 86.64%, compared to 85.76% a year earlier. Furthermore, the 61st month persistency ratio also enhanced to 61.51%, up from 57.8% in the same period last year.
Notably, SBI Life maintains its leading position in the individual rated premium sector, holding a 22.8% share of the private market in fiscal 2025.
Market Activity and Stock Performance
On Friday, SBI Life’s shares surged by as much as 9.56%, reaching ₹1,762 per share—the highest point since October 21, 2024. However, it later adjusted to a 4.38% increase, trading at ₹1,678.70 by mid-morning. This performance stands in contrast to a 1.27% decline in the NSE Nifty 50 index.
- Current Trading Price: ₹1,678.70
- Volume Traded: 17 times the 30-day average
- Relative Strength Index: 60
Investors are keeping a close eye on SBI Life’s adaptability, especially in the bancassurance channel, which has shown stabilization, contributing to overall premium growth. However, shifts in the product mix have affected agency channel growth, suggesting a need for ongoing diversification and alignment in product offerings.
In summary, while SBI Life Insurance faces challenges in certain areas, its overall performance metrics and strategic positioning in the market indicate a positive trajectory for the company and its stakeholders.
