SBI Life Insurance shares soared over 9% in early trade on Friday after the company’s Q4 results were released post-market hours on Thursday. The stock touched a high of Rs 1,762, catching the market’s eye as investors responded positively to the insurer’s performance and outlook.
But what is fuelling the rally. Analysts at top brokerages like Nomura and Nuvama have not only maintained their Buy calls but also set higher price targets for the stock, citing strong growth in value of new business (VNB), improving margins, and a solid product mix strategy. Let’s take a look what is the brokerage say-
Nomura on SBI Life: Sets Rs 1,800 target, maintains ‘Buy’ as margins shine
The brokerage firm, Nomura has a Buy rating on the stock with a target price of Rs 1,800, implying nearly 12% upside from current levels.
According to the brokerage house, SBI Life delivered strong performance in the March quarter, with total Annual Premium Equivalent (APE) growing by 21% year-on-year and VNB margins expanding by about 220 basis points. This led to a 10% growth in VNB, a key profitability metric.
“Management attributed the expansion of margins to high-sum-assured protection products, rider attachment to low-margin products and a shift in product mix,” the brokerage firm noted in its report.
More interestingly, SBI Life’s protection segment saw strong 22% growth, while non-participating (non-PAR) policies, typically higher-margin grew by 51%. Although ULIP contributions dipped 5.4%, the company expects to rebalance its mix with more traditional products in the upcoming fiscal.
The insurer also guided for individual APE growth of 13-14% in FY26, supported by expansion in its branch network, agent force, and overall investments.
Nuvama on SBI Life: Target price set to Rs 1,890, Remains bullish
Nuvama, too, retained its Buy rating on SBI Life, with a slightly higher target price of Rs 1,890. The brokerage noted that while overall APE growth was modest at just 2.1% YoY, VNB margins expanded strongly to 30.4% in Q4FY25 – up 332 basis points quarter-on-quarter.
“Q4 VNB grew 9.7% YoY to Rs 1,650 crore, beating our estimates by 11.6%,” the brokerage added in its report.
The operating Return on Embedded Value (RoEV) stood at a healthy 20.2% for FY25, indicating robust operating performance. Even as ULIPs declined sharply during the quarter, non-PAR products and positive assumption changes supported the overall growth in margins and VNB.
Nuvama expects SBI Life to continue delivering steady APE growth of 13-14% in FY26, despite some weakness expected in the bank-led distribution channel.