Rs 800 profit per share: This insurance stock has 70% upside potential - here's why

SBI Life Share Price Target 2023: Stating that the insurance sector outlook is positive with insurance companies improving their operating metrics, domestic brokerage firm BNP Paribas remained bullish on SBI Life Insurance with a Buy rating. 

It said that the current insurance taxation has driven demand worries but the sales growth should get addressed in the medium term and drive re-rating. 

The recent Union Budget stipulation imposing income tax at marginal rates on non-ULIP life insurance products with an annual premium greater than Rs 500k, materially reduces the return attractiveness of such products which were earlier tax-free. 

The non-par guarantee products, especially retirement planning driven, are impacted the most, it said, adding that there is some impact on par products as well but none on ULIPs. 

It said that sales to multiple family members within the same household and tweaking of product structure and moving to a long term capital gains rate driven taxation may be a practical workaround to mitigate tax implications.

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SBI Life Insurance, it said that is the least impacted, across parameters, thanks to a minuscule exposure. It said that shares of SBI Life can yield a whopping 70 per cent from the current market price in the next 12 months. The target price set by BNP Paribas on SBI Life is Rs 1900.

The brokerage firm also said that all new tax-payers being directed to the new tax regime wherein 80C deductions for income tax on insurance purchase does not apply will have a much immediate impact.

 Also read- Income Tax slabs, rates and exemptions for senior citizens: Know how income tax on pension is calculated