The shares of SBI Life Insurance Co. were trading for Rs 1,275 a piece, almost flat for the day during the first half of the trading session on Thursday. In the last six months, the stock has generated a return of 15.38% for its shareholders. It has trailed the benchmark Nifty50 index which has returned 19.34% during the same period.
SBI Life is a life insurance company owned by the State Bank of India, India’s largest lender. It was started as a joint venture between SBI and French financial institution BNP Paribas Cardif. As of the present date, only SBI holds a 55.46% stake in the company as the promoter.
For the quarter ending September 2022 (Q2FY23), the life insurer reported an income of Rs 27,717 crore, up 8% on a year-on-year (YoY) basis from Rs 25,636 it clocked during Q2FY22.
Its net profit in the recent quarter stood at Rs 437 crore, a sharp increase of 55% from Rs 282 crore announced during the same quarter last year.
The analysts are particularly upbeat on the stock hoping the company will win back its market share going forward. The growth is expected to be contributed by a rising focus on protection and non-par savings, annuity segment. The overall effect of this will be reflected in margin improvement.
Brokerage house Motilal Oswal has provided a buy rating on the stock with a target price of Rs 1,600 per share. It is 2.5x times of September 2024 projected enterprise value. This translates into a potential upside of 25.5% for the investors.
Written by Vikalp Mishra
