SBI Life Insurance has been one of the fastest-growing insurer and has gained significant market share among the private players in the last 5-6 years. SBI Life has by far the largest bancassurance network consisting of around 25,000 branches of its parent bank SBI. It also enjoys the lowest cost structure amongst private peers.

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SBI Life’s focus on growing the high margin protection business is very encouraging. The improved product mix in favour of the protection business will lead to an increased value of new business margins.

The stock is currently trading at around 2.8 times its embedded value as on September 20th. The valuation is at more than a 50 percent discount to that of HDFC Life’s valuations. The reasonable valuation can offer upside potential as SBI Life continues to steadily gain market share and improved return ratios.

Moneycontrol.com’s Neha Dave talks about the stock.

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(Edited by : Ajay Vaishnav)

First Published:Mar 1, 2021 1:36 PM IST