SBI Life Insurance shares experienced a significant surge of over 9% in early Friday trading following the release of the company’s Q4 results after market hours on Thursday. The stock reached a high of Rs 1,762, capturing investor attention as analysts responded positively to the insurer’s performance and future outlook.
Several top brokerages, including Nomura and Nuvama, maintained their ‘Buy’ recommendations while increasing their price targets for the stock. Analysts cited strong growth in the value of new business (VNB), improving margins, and a solid product mix strategy as key factors driving their optimism.
Analyst Insights
Nomura Maintains ‘Buy’ with Rs 1,800 Target
Nomura retained its ‘Buy’ rating on SBI Life with a target price of Rs 1,800, suggesting nearly 12% upside potential from current levels. The brokerage firm highlighted SBI Life’s strong Q4 performance, marked by a 21% year-on-year growth in total Annual Premium Equivalent (APE) and a significant expansion of VNB margins by about 220 basis points. This resulted in a 10% growth in VNB, a crucial profitability metric.
The brokerage noted that management attributed the margin expansion to several factors, including high-sum-assured protection products, rider attachments to low-margin products, and a strategic shift in product mix. Notably, SBI Life’s protection segment demonstrated robust 22% growth, while non-participating (non-PAR) policies, typically higher-margin products, grew by 51%. Although ULIP contributions dipped 5.4%, the company expects to rebalance its mix with more traditional products in the upcoming fiscal year.
SBI Life also guided for individual APE growth of 13-14% in FY26, supported by expansion in its branch network, agent force, and overall investments.
Nuvama Remains Bullish with Rs 1,890 Target
Nuvama also retained its ‘Buy’ rating on SBI Life, setting a slightly higher target price of Rs 1,890. The brokerage observed that while overall APE growth was modest at 2.1% YoY, VNB margins expanded strongly to 30.4% in Q4FY25 – an increase of 332 basis points quarter-on-quarter.
“Q4 VNB grew 9.7% YoY to Rs 1,650 crore, beating our estimates by 11.6%,” Nuvama noted in its report. The operating Return on Embedded Value (RoEV) stood at a healthy 20.2% for FY25, indicating robust operating performance. Despite a sharp decline in ULIPs during the quarter, non-PAR products and positive assumption changes supported overall growth in margins and VNB.
Nuvama expects SBI Life to continue delivering steady APE growth of 13-14% in FY26, despite anticipated weakness in the bank-led distribution channel.
