$SBILIFE

SBI Life Insurance citing the insurer's strong growth prospects despite margin pressure during the June quarter. SBI Life reported a 29% year-on-year growth in Value of New Business (VNB) in the first quarter of FY27, broadly in line with the brokerage's expectations. However, the VNB margin came in at 26.2%, below estimates, primarily due to a sharp increase in large group protection sales, with Annualised Premium Equivalent (APE) from the segment surging 313% year-on-year, which reduced the margin by around 60 basis points. The brokerage also noted that the impact of the GST rate cut continued to weigh on profitability, lowering the VNB margin by about 110 basis points in the June quarter, similar to the drag seen over the previous two quarters. Excluding this impact, the VNB margin would have stood at 27.4%. Despite these headwinds, the analyst expects SBI Life to deliver mid-teen growth in both APE and VNB during FY27. The brokerage also highlighted recent remarks by SBI Chairman, who said the bank plans to sell only the products of its subsidiary companies through SBI branches. According to the analyst, this removes concerns over SBI Life's bancassurance distribution channel. The brokerage further noted that life insurance stocks under its coverage have corrected 9% to 26% so far this year, with SBI Life emerging as the most resilient, declining just 9% on a year-to-date basis.