SBI Life Insurance Co. fell short of estimates in terms of premium income by 6% due to challenges in the group insurance segment and subdued growth in the bancassurance channel.

The company's annualized premium equivalent (APE) growth was only 3% year-on-year, which was 4% below expectations. The value of new business (VNB) also declined by 3% year-on-year, mainly because of a higher base from the previous fiscal year and a focus on ULIP products, resulting in a VNB margin contraction of 159 basis points.

Despite these challenges, SBI Life remains optimistic about future prospects, projecting APE growth of 15-17% year-on-year. The company expects a compound annual growth rate (CAGR) of 17% for APE and 21% for new business premium (NBP) from FY24 to FY27. Currently, SBI Life is trading at a price-to-embedded value (P/EV) multiple of 2.3, 2.0, and 1.7 times its FY25, FY26, and FY27 estimated embedded values, respectively. Asit C Mehta maintains a 'Buy' rating on SBI Life Insurance, setting a target price of Rs 2,015, valuing the company at 2.5 times its FY26 estimated embedded value.