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Motilal Oswal Suggests To Buy This Insurance Stock For 29% Return,Steady Quarter
Reputed brokerage firm Motilal Oswal initiated a buy call for the stocks of SBI Life Insurance, for 29% returns, in 1 year. "SBILIFE remains our preferred pick in the Life Insurance space. We reiterate our Buy rating," the firm mentioned.
Target Price
The Current Market Price (CMP) of SBI Life Insurance, is Rs. 1,238. Motilal Oswal has estimated a Target Price for the stock at Rs. 1,600. The company is anticipated to give 29% return, in 1 year.
| Stock Outlook | |
|---|---|
| Current Market Price (CMP) | Rs. 1,238 |
| Target Price | Rs. 1,600 |
| 1 year returns | 29.00% |
Company performance
SBI Life Insurance (SBI-LIFE) reported a strong 3QFY22 report, with APE growth of 31% YoY and stellar VNB growth of 54% (10% beat). VNB margin stood broadly stable QoQ at 25.6%. Among segments, ULIP saw an APE growth of 28% YoY. Non-PAR/Protection grew better than its peers at 67%/27% YoY. Persistency improved across cohorts, with 13th-month persistency at 87.2% (up 103bp YoY). The Credit Life segment grew 31% YoY. Total Annuity and the Pension business grew 28% YoY in 9MFY22. SBI-LIFE's net premium income stood at Rs. 146.6 b, in Q3FY22.
Comments by Motilal Oswal
Commenting on the company's potential, Motilal Oswal said, "SBI-LIFE posted a 31% YoY growth in net premium, led by a 105% YoY growth in the single premium business. Growth in renewal premium improved to 14.4% YoY v/s 9% YoY in 2QFY22. Shareholders' PAT grew 56% YoY, Rs. 3.64b (20% beat), aided by controlled expenses. The Protection business grew 27% YoY on the back of a 55% growth in the Credit Protection business. We raise our growth projections and expect SBI-LIFE to deliver 29% CAGR in APE over FY21-24E."
About the company
SBI Life Insurance incorporated in October 2000, is registered with the IRDAI in March 2001. SBI Life strives to make insurance accessible across the country through 947 offices, 18,236 employees, an individual agent network of about 143,232 agents, 60 corporate agents, a widespread bancassurance network of 14 partners, more than 27,000 partner branches, 108 brokers, and other insurance marketing firms. The listed company has an authorized capital of more than Rs. 20.0 billion and a paid-up capital of above Rs. 10.0 billion. The AuM is more than Rs. 2,441.8 billion.
(Also read: 4 Best Debt Mutual Funds For Long-Term, Rated By Crisil, Should You Invest In Debt Fund?)
Disclaimer
The above stock was picked from the brokerage report of Motilal Oswal. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.
