SBI Life shares hit 52-week high post Q4 results; brokerages set higher target price

SBI Life Insurance Co. Ltd share price traded over 3 percent higher on Tuesday, hitting a new 52-week high price intra-day on positive fourth quarter earnings.

SBI Life  on Monday reported a flat net profit at Rs 532 crore for the March 2021 quarter. The life insurer had posted a net profit of Rs 531 crore in the corresponding quarter of the previous financial year 2019-20.

Total income in January-March 2021 jumped multi-fold to Rs 20,897 crore, compared with Rs 5,675 crore in the year-ago period, it said in a regulatory filing. Net premium income jumped to Rs 15,556 crore, from Rs 11,863 crore a year ago.

For the full year, the company's net profit rose 2 percent to Rs 1,456 crore in 2020-21, against Rs 1,422 crore in 2019-20. Income during the year soared to Rs 82,085 crore, from Rs 43,843 crore a year earlier.

Net premium income in the fiscal rose to Rs 49,768 crore as against Rs 40,324 crore, while the single premium income increased to Rs 10,286 crore from Rs 6,764 crore.

The company's new business premium in 2020-21 rose to Rs 20,624 crore, up by 24 percent as against Rs 16,592 crore.

Single premium has increased by 52 percent over the corresponding year, the insurer said.

Value of new business registered 16 percent growth in FY21 to Rs 2,334 crore.

The company said its gross written premium has crossed the Rs 50,000 crore (Rs 500 billion) mark.

"The increase in gross written premium is mainly due to strong growth in renewal premium by 23 percent to Rs 29,630 crore in FY2021 from Rs 24,040 crore in FY20," it said.

The assets under management showed a rise of 38 percent to Rs 2,20,871 crore as of March 31, 2021.

SBI Life said it has declared an interim dividend of Rs 2.5 per share with a strong solvency ratio of 2.15.

Among brokerages, Morgan Stanley has raised the target price for SBI Life to Rs 1,275 per share as it said that valuations look attractive at current levels.

CLSA also has a 'buy' rating with a target price of Rs 1,250, from the previous Rs 1,125 per share. It said the SBI Life has significant headroom for growth and margin expansion following fourth-quarter results.

Nomura has set a target price of Rs 1,175 on SBI Life on distribution strength that is clearly showing up with 43 percent retail protection growth. The brokerage added that valuations are still fine for the strong franchise.

Credit Suisse, however, has maintained a neutral stance with a target price of Rs 930 per share as it expects the pace of VNB expansion for the company to moderate over the medium term. The brokerage has increased EPS for the company, however by 7 percent for FY22.23.

SBI Life stock price quoted at Rs 988.25 at 12.23 pm on NSE, rising 3.11 percent. The stock opened at Rs 998, rising over 4 percent from its previous close of Rs 958.60 apiece. The stock touched the new 52-week high price at Rs 1,005 per share.

The one-month gain in the stock is more than 11 percent, while in the last three months SBI Life's share price has surged over 14 percent on positive brokerage commentary and higher target price. The one-year and three-year return on the stock is 43.50 percent and 40.5 percent, respectively.