SBI Life Insurance Q4 preview: APE growth seen at 37%, VNB may rise 43%

SBI Life Insurance Company is likely to see healthy growth in key earnings parameters with annual premium equivalent (APE) rising around 37 year-on-year (YoY) percent and value of new business (VNB) increasing around 43 percent YoY in the quarter ended March 2021.

The share price of the second-largest life insurance company rose 2.7 percent so far in 2021 and surged 27.8 percent in the last 12 months.

"We expect 36.7 percent YoY APE growth in Q4 FY21 on a low base of 13 percent YoY decline in Q4 FY20. We expect 74 percent YoY growth in APE in March 2021 (down 43 percent YoY in March 2020). APE growth was muted at 2 percent YoY in January 2021 but bounced back to 54 percent YoY in February 2021," said Kotak Institutional Equities which expects 43 percent YoY growth in VNB.

"Our estimates bake-in a further increase in VNB margin to 20.9 percent in Q4 FY21 (up 90 bps QoQ/YoY), reflecting a rise in the share of non-par savings and protection business," the brokerage added.

Motilal Oswal also expects around 37 percent YoY growth in APE and a 43 percent YoY rise in VNB. Assets under management is expected to surge 35 percent YoY and new premium income could grow 32 percent YoY in the quarter ended March 2021, said the brokerage which expects a 60 bps YoY increase in VNB margin and a solvency ratio of 228.7 percent for the quarter, against 195 percent in the corresponding quarter of last the fiscal.