Stocks

SBI Life stock hits 52-week high

Our Bureau Chennai | Updated on May 05, 2021

The scrip touches the ₹1,000-mark after 18 months

The stock of SBI Life Insurance on Tuesday hit a fresh 52-week high on the back of strong performance that turned analysts more bullish on the stock. The stock crossed the ₹1,000-mark after 18 months. In October 2019, it had registered its all-time peak of ₹1,030.

According to analysts, the strong show in new business margin and annualised premium equivalent growth verticals will help the company see robust growth in the coming years.

The stock of SBI Life hit a 52-week high at ₹1,005.05 on the BSE on Tuesday. It, however, closed at ₹983.25 on the BSE, up 2.5 per cent, over the previous day’s close, as the general market weakness triggered some profit-booking on the stock too. The stock so far has given a return of 8.66 per cent since the beginning of 2021 and 42.8 per cent in the last one year.

 

New business margin

“SBI Life performance was better than our forecasts (our first cut had an error on VNB margins),” said YES Securities. The product mix has been moving favourably with rising share of non par, annuity and continued momentum in protection (both retail and group).

“Going ahead too, we expect the momentum to sustain especially in the banca channel, where both SBI (through rekindled strategy) and non-SBI (new tie ups yet to scale up) would see healthy growth,” said YES Securities, which retained a ‘Buy’ rating with a higher price target of ₹1,221.

SBI Life has been able to manage improvement in product mix, distribution productivity, and cost efficiency leading to more than expected VNB growth, VNB margin and EV growth through positive variances, said ICICI Securities.

Caution due to Covid

Another domestic brokerage Motilal Oswal Financial said: SBI Life has reported strong growth in the Individual Protection and Non-PAR/Annuity businesses, while the ULIP business is also seeing recovery. “We expect growth to revive from FY22E — we estimate APE growth of 25 per cent for FY22. However, we remain watchful of the impact of the lockdowns announced in various key States due to the resurgence in Covid cases,” it said.

The management remains firm over the rising share of protection plans through increasing focus on credit protection. “However, like I-PRU, SBIL also has large dependence on Bancasurance (about 56 per cent of distribution by SBI), which could trigger steady growth for ULIPs especially in H2FY22 as the overall equity market is witnessing some stabilising trends,” said Emkay Global

Published on May 04, 2021

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