SBI Life Q3 Results Preview: 19% YoY profit jump likely; expect healthy premium growth

Sequentially, the net profit is seen rising around 12 per cent. In July-September, the insurer had reported a 17.71 per cent year-on-year (YoY) fall in net profit at Rs 246.62 crore compared with Rs 299.73 crore in the same quarter last year.

Brokerage ICICI Direct, which pegs the insurer’s premium growth at 21 per cent YoY in October-December, sees net interest income clocking in at Rs 17,769.8 crore, up 29.1 per cent on-year and 21.2 per cent sequentially.

The brokerage sees SBI Life’s pre-provisioning profit at Rs 272.1 crore, registering an 8.2 per cent jump YoY and an increase of 6.2 per cent sequentially.

“Focus on individual business including unit-linked and annuity products coupled with a jump in group business is seen keeping new business premium (NBP) momentum robust at 55% YoY to 8423 crore,” the brokerage said.

“Elevated accretion in single group business is expected to keep annualised premium equivalent (APE) growth at 30% YoY to Rs 4,537 crore. The pace remains healthy. Claims are expected to remain higher than normal run rate owing to the second wave, but moderation in infection rate and provision buffer is expected to keep surplus healthy at Rs 272 crore.”

According to YES Securities, SBI Life’s new business profit is seen at Rs 9,483.5 crore for the quarter ended December, registering a rise of 74 per cent YoY and 37 per cent sequentially.

The value of the new business is seen at Rs 1,124.60 crores in October-December, up 48 per cent YoY and 9 per cent sequentially, YES Securities said.

“We pencil in new business growth assumptions based on trends observed till November 2021 when SBIL had displayed NBP/APE growth of 38%/1% for 2M3QFY22 (October and November 2021) over 2M2QFY22 (July and August 2021). We pencil in APE margin expansion of 60 bps QoQ based on expected business mix changes,” the brokerage said.

ICICI Direct has a buy rating for SBI Life with a target price of Rs 1,360. The stock closed 0.81 per cent lower at Rs 1,237.95 on the National Stock Exchange on Thursday.