The company released its Q4 FY26 earnings in the post-market hours on Wednesday. While net profit declined from the same period last year, net premium income rose 16% YoY to Rs 27,684 crore, aided by demand across segments following GST reforms. Annualised premium equivalent (APE) increased 5.5% YoY to Rs 5,750 crore, falling short of expectations. The value of new business declined to Rs 1,630 crore during the quarter under review from Rs 1,670 crore in the corresponding quarter of the previous financial year.
SBI Life’s margins weakened in Q4, with VNB margin contracting to 28.4% from about 30.5% in Q4 FY25. The solvency ratio stood at 190% in Q4, compared with 196% a year earlier.
Nomura on SBI Life
Nomura maintained its ‘Buy’ rating on the stock but reduced its target price to Rs 2,440 apiece from Rs 2,445 apiece. The latest target price implies an upside potential of more than 29% from the stock’s previous closing price of Rs 1,884.80 apiece on NSE. The international brokerage said the company managed well in a tough year.
It highlighted that SBI Life’s management is aiming for 14% APE growth in the near term. The overall FY26 VNB margin stood at 27.5%, which was 10 basis points ahead of Nomura’s estimates and at the upper end of the 26-28% guidance. For the ongoing FY27, the management has guided to a 27-28% VNB margin as it expects enhancement in product and customer profile to support higher margins.
“Unlike peers, which saw negative operating variance or assumption changes owing to weaker persistency performance, SBI Life reported positive operating variance of 1.82% (of opening EV) in FY26. Better-than-expected mortality and persistency trends supported the positive operating variance of FY26,” Nomura said.
The brokerage highlighted that SBI Life has delivered stable performance through disrupted times, for which it deserves a premium valuation. “The regulatory landscape for the insurance industry has been challenging since FY23. SBI Life has delivered 14-16% APE-VNB CAGRs and average ROEVs of 20.9% over FY22-26. In comparison, HDFC Life/Axis Max Life have delivered APE-VNB CAGRs of 14-11%/17-13% and average ROEVs of 17%/19.8% during the same period,” it noted. Nomura said its target price cut was driven by a 3% miss on economic variance.
HDFC Securities on SBI Life
HDFC Securities maintained a ‘Buy’ rating with a target price of Rs 2,400 apiece. This implies an upside potential of more than 27% from the stock’s previous closing price. The brokerage noted that APE and VNB growth came in at 13% and 14% YoY respectively, slightly below expectations. Margins were impacted by around 150 basis points due to GST input tax credit, though this was partly offset by a higher non-par product mix.
The brokerage highlighted that return on embedded value remained strong at about 20%, supported by favourable experience variance. The ULIP mix continues to decline as the company shifts towards higher-margin traditional products. Its strong distribution network through SBI remains a key advantage, it said, while revising growth estimates to a 14-15% CAGR over FY26-28, with the stock valued at 2.1x March 2028 estimated embedded value.
Nuvama on SBI Life
Nuvama maintained a ‘Buy’ rating on the stock with a target price of Rs 2,390 apiece, implying an upside potential of nearly 27% from the stock’s previous closing price. It noted that the firm’s Q4 FY26 performance was muted as total APE growth remained weak at 5.5% YoY. Individual APE grew at a modest 7.8% YoY, but group APE sharply declined 13.8% YoY.
SBI Life’s VNB came below estimates, against expectations of 3.3% growth, while group protection sharply fell around 54% YoY, impacting overall group business growth, Nuvama said.
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