SBI Life Reaches New High; rebounded 24% in 2 months thanks to good business prospects

Shares of SBI Life Insurance Company hit a new high of Rs 1,332.30, up 2% from BSE in Thursday’s intraday trading, in an otherwise subdued market on expectation of a higher outlook. robust growth. The insurance company’s stock is up 24% in the past two months, while it has jumped 16% in the past six months. This compares to a 4% rise in the S&P BSE Sensex over the six-month period. SBI Life is a subsidiary of State Bank of India (SBI).

SBI Life recorded an impressive overall performance in the first quarter (April to June quarter) of the current fiscal year 2022-23, with positively surprising growth and margins. In terms of overall annual premium equivalent (APE) growth and retail protection APE growth, SBI Life bucked the slowing trend seen among its peers.

Driven by exceptionally strong growth in non-participating guaranteed savings products, new business value (NBV) margins increased 6.7 ppts year-on-year to 30.4%, while APE recorded growth of 79.0% year-over-year on a favorable basis (3-year CAGR: 16.0%).

“The strong first quarter performance underscores the strength of SBI Life’s formidable combination of brand and distribution reach across geography and demographics. Management remained confident of growth and maintaining margin trajectory.” , Emkay Global Financial Services analysts said in a statement. update report.

With its distribution channels running at full steam, expanding product offerings and growing acceptance, the brokerage firm expects robust growth to continue in FY23 and beyond. .

“The company has three growth levers that remain in place (1) SBI’s massive distribution network (over 24,000 branches); (2) a healthy mix of protection and NPAR; and (3) the ratio of operating among its peers (FY22: 8.8%).“We are increasing VNB estimates by 12/11% to account for the pace of APE and VNB margins. We expect SBI Life to deliver a healthy FY22-24E APE/VNB CAGR of 18/25%,” HDFC Securities analysts said.

Meanwhile, SBI Life in its FY22 annual report said the company has adopted smarter ways to onboard partners, identify potential customers and speed up system integration. The company is constantly using and improving its analytics capabilities using machine learning and artificial intelligence (AI) to improve efficiency and reduce risk while growing its business. A focus on technology initiatives throughout the agency channel value chain has resulted in improved business performance.

With a focus on financial inclusion to enable low income groups in society to access products that enable them to protect their life and savings, the company offers various insurance products such as “Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Grameen Politics Bima and Grameen Super Suraksha, in order to protect the most economically vulnerable part of society.

Low product penetration in India will continue to provide significant headroom for industry growth. Given these developments, FY23 will see strong demand for tailored life insurance offerings, meaning the business’s long-term growth opportunities will be stronger than ever, SBI Life said.

Technology outlook

Objective: Rs 1,371

Support: Rs 1,245


After hitting a record high of Rs 1,332, the next immediate hurdle for SBI Life shares is Rs 1,371 each. This is the upper end of the Bollinger Band heading on the daily charts. Beyond that, the next target for the stock could be Rs 1,382, according to the monthly Fibonacci chart.


On the other hand, its immediate support remains at Rs 1,245 per share – its 20-day moving average (20-DMA).


That said, while the stock 20, 50, and 100-DMA have positive crossovers, the 100-DMA and 200-DMA have negative crossover, warranting a little caution.

(With contributions by Nikita Vashisht)

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