Motilal Oswal Initiates Buy On Large Cap SBI Group Stock, Sees 22% Potential Upside

Leading brokerage firm Motilal Oswal Financial Services initiates coverage of SBI Life Insurance Company Ltd. (SBILIFE) with a positive outlook. The brokerage assigns buy on SBILIFE with a target price of Rs 1,570 per share, claiming a positional upside of up to 22% considering the given target price. The market cap of SBILIFE is Rs 1,29,424.86 Crore.

SBILIFE is a large cap Life Insurance sector company of SBI Group, India's largest Bank. The company provides Life Insurance to customers through its 992 offices, a large and productive individual agent network of about 208,774 agents and other insurance marketing firms.

Valuation and view

According to Motilal Oswal Financial Services, SBILIFE reported a slightly muted quarter, with an in line APE and a miss in VNB margins, falling from 31.6% in 4QFY23 to 28.7% in 1QFY24. The fall in margins was primarily due to weakness in the Non-Par segment. SBI channel productivity has been improving and the company is working on improving its efficiency in the agency channel. SBI Life continues to maintain its cost leadership.

Buy For TP of Rs 1,560 apiece

"We estimate a 20% CAGR in APE over FY32-25 and estimate VNB margin to remain at ~29.7% in FY25, thus enabling a 17% VNB CAGR. RoEV is expected to stay at around ~22%. We reiterate our Buy rating with a TP of INR1,570 (2.3x Mar'25E EV)," the brokerage has said.

Stock Movement

On Wednesday, the stock of SBILIFE ended at Rs 1293 per share, down 0.58% compared to its previous close of Rs 1300.50 per share. It hit an intraday high of Rs 1297.75 and an intraday low of Rs 1274.65 on BSE. The stock's 52-week high is Rs 1339.55 per share and 52-week low is Rs 1039.25 per share.

The stock has given 1.26% negative return in 1 week, while 2.11% positive return on 1 month. It gained 15.76% in 3 months. In 1 year, it gained 13.57% in 1 year, 20.06% in 2 years, 49.17% in 3 years, and 92.21% in 5 years, respectively.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal Financial Services. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.