CLSA, Morgan Stanley, and Nomura bullish on SBI Life; stock available at attractive valuations – check targets here

A day after its quarter four results, the brokerage firms have raised expectations from this insurance company. CLSA, Morgan Stanley, and Nomura has given a Buy recommendation for SBI Life Insurance on the back of valuations, the value of new business, and distribution strength. 

SBI Life on Monday reported flat progress in terms of Q4 profit. It posted a net profit of Rs 532.38 crore for the March-ended quarter (Q4), a little above Rs 530.67 crore in the year-ago period. 

SBI Life has significant headroom for growth and margin expansion, CLSA says after the insurance major’s Q4 results. Raising FY22/23 VNB estimates by 9-10 per cent, the brokerage firm maintains a Buy call option with a target of Rs 1,250 per share. Its previous target was Rs 1,125 per share. CLSA adds, the current valuations of SBI Life are undemanding for distribution and cost base. 

Similarly, SBI Life’s distribution strength is clearly showing up, with 43% retail protection growth, Nomura says, adding that valuations still fine for the strong franchise. The brokerage firm says it has delivered 10, 19, and 21 per cent CAGR in APE, VNB, and EV respectively over a period of FY18-21.  

Nomura maintaining Buy recommendation, sets a target of Rs 1175 per share, it mentions that RoEV of 19 per cent is among best in the industry and its VNB Margin is also catching up. 

Maintaining the Overweight stance, Morgan Stanley says, the better-than-expected numbers by SBI Life across key parameters. It adds that the valuations of SBI Life looking attractive at current levels. The brokerage firm says near-term perception should be better than lenders. It sets a target of Rs 1275 per share.  

SBI Life’s value of new business (VoNB) increased by 16 percent year-on-year basis to Rs 2,330 crore For FY21. VoNB margin increased by 170 bps from 18.7 percent in FY20 to 20.4 percent in FY21. 

The share of the insurance company is trading over two and a half per cent higher to Rs 984 per share. It had breached Rs 1000 per share level today intraday.