SBI Life - Q3 FY21 - YES Securities

(Rating: Conviction BUY, TP: Rs1,137, Upside 33%)

- Strong performance in Q3 FY21 with VNB and VNB margins ahead of expectations by 10% and 230bps respectively

- Credit protect business (Attachment with loans) is increasing significantly with retail lending picking up, this is highest profit making business, SBI Life gains significantly here

- ULIP recovery benefits SBI Life as it still has a high 62% share in APE

- Scope to improve non-par share given large players in the segment such as HDFC Life and Max Life are taking a back seat given their high share

- SBI Life has underperformed other players in the past 6-8 months

- Trading at FY23E P/EV of 2x as compared to 2.2x of ICICI Pru and 4.0x for HDFC Life in spite of being the lowest cost operator and better growth as compared to ICICI Pru

Shares of SBI Life Insurance Company Ltd was last trading in BSE at Rs.861.6 as compared to the previous close of Rs. 879.25. The total number of shares traded during the day was 174279 in over 10248 trades.

The stock hit an intraday high of Rs. 885.45 and intraday low of 838.2. The net turnover during the day was Rs. 150434947.

Source : Equity Bulls

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