'Buy' Maintained On SBI Life By ICICI Securities, Sees 33% Upside, Here's Why

ICICI Securities Report

Stocks to Buy - We maintain 'Buy' on SBI Life Insurance Company Ltd. considering the attractive valuation and no major change in medium/long-term potential value of new business growth/return on embedded value. While some adjustments in channel preference may/ may not impact near-term VNB growth proposition, we believe current valuation correction is overdone considering the scope of possibilities around lower bancassurance growth being able to offset by higher other channel growth and margin improvement.

We back the long-term story basis-

1. available distribution and margin levers to clock over 15% VNB CAGR and

2. strong track record of 26% VNB CAGR between FY19- 24 which included low bancassurance volume growth between FY19-21.

SBI Life remains better placed within industry in terms of lower levels of guaranteed products, cost structure and deeper population access. We value the stock based on 2.4 times (unchanged) FY26E EV/ share to arrive at our target price of Rs 1,978 (unchanged).

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