SBILIFE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.2

📊 Core Financials Analysis

Profitability

ROE: 15.1% and ROCE: 16.9% — strong, reflecting efficient capital deployment and healthy underwriting margins.

EPS: ₹24.8 — consistent earnings, though PAT declined from ₹814 Cr to ₹594 Cr, indicating some quarterly volatility.

Quarterly Profit Variation: +14.4% YoY — solid growth trajectory despite short-term softness.

Balance Sheet & Cash Flow

Debt-to-equity: 0.00 — debt-free, a major strength for a life insurer.

Dividend Yield: 0.15% — minimal, consistent with reinvestment into growth.

Cash flows are stable, supported by strong premium collections and investment income.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 73.4 Fairly valued vs industry PE of 73.5

P/B Ratio ~10.2 Elevated, but justified by strong ROE and brand premium

PEG Ratio 4.31 Overvalued relative to growth

Intrinsic Value ₹1,700–₹1,750 (est.) Current price slightly above fair value

🧠 Business Model & Competitive Edge

Company Profile: SBI Life Insurance is one of India’s largest private life insurers, offering a diversified portfolio of protection, savings, and annuity products.

Strengths

Strong parentage (SBI) and access to a vast bancassurance network.

High persistency ratios and improving VNB (Value of New Business) margins.

Institutional interest rising — FII holdings up by 0.46%.

Challenges

High PEG ratio and valuation multiples.

DII holding declined, suggesting cautious domestic sentiment.

Regulatory changes and competitive pricing in ULIP and term segments.

According to Stocks-Buy, SBILIFE is considered a “Diamond” grade stock, but currently “Very Expensive.” Price targets for FY26 range from ₹1,942 to ₹2,069, with long-term projections reaching ₹2,214 by FY27

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📈 Technical & Sentiment Overview

RSI: 50.2 — neutral zone, no strong momentum.

MACD: -4.00 — bearish crossover, short-term caution advised.

DMA 50 & 200: Price above both — confirms long-term uptrend.

Volume: Above weekly average — steady investor interest.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹1,700–₹1,750 — near intrinsic value and technical support.

Holding Strategy

Ideal for long-term investors seeking exposure to India’s life insurance growth.

Price targets for FY27 range from ₹2,200 to ₹2,400; long-term targets for FY30 could reach ₹3,000+.

Monitor VNB margins, premium growth, and regulatory developments.

SBILIFE is a high-quality compounder with strong fundamentals, brand strength, and sector tailwinds. If you're building a portfolio focused on financial resilience and long-term compounding, this one deserves a core allocation.

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