Review

SBI LIFE INSURANCE 

Ticker : 540719  
FV: Rs 10  
52-Week H/L: Rs 1030/520

We had previously recommended SBI Life Insurance in volume 36, issue no. 01 (dated October 28, 2019), when the stock was trading at Rs 969.30. SBI Life Insurance Limited (SBIL) offers individual and group insurance plans and also, provides retirement planning, tax calculators, online premium payment, and other services. On a standalone quarterly front, in Q1FY21, gross written premium (GWP) grew by 14.2 per cent YoY to Rs 7,643 crore, on the back of renewal premium, which increased by 29.5 per cent. SBIL’s solvency ratio increased to 239 per cent in Q1FY21 from 195 per cent in FY20, which is higher than the regulatory requirement of 150 per cent. Net profit increased by 5.11 per cent to Rs 390.89 crore in Q1FY21 from Rs 371.90 crore in Q1FY20. SBIL has low-cost ratios, which will protect the margin during downturns. Further, its granular business, coupled with a high share of debt in a unit-linked insurance plan (ULIP) portfolio will support in maintaining persistency. Thus, we recommend a HOLD.