SBI Life slips 3% post Q3; Street flags GST impact, sees margin recovery

SBI Life Insurance Company shares slipped 3.3 per cent in trade, logging an intra-day low at ₹1,984.65 per share on BSE. The selling pressure came after the company posted its December quarter (Q3FY26) numbers.   At 10:54 AM, SBI Life’s share price was trading 1.67 per cent lower at ₹2,018.25 per share on BSE. In comparison, the BSE Sensex was down 0.51 per cent at 81,922.43.

 

In Q3, SBI Life Insurance reported a nearly 5 per cent year-on-year (Y-o-Y) increase in net profit at ₹577 crore in the third quarter of 2025-26 (Q3FY26).

 

Net premium income of the insurer grew by 21.8 per cent Y-o-Y to ₹30,245.32 crore from ₹24,828 crore in the year-ago period. Annualised premium equivalent (APE) of the insurer grew 24 per cent Y-o-Y at ₹6,940 crore.

 

Brokerages’ view on SBI Life 

Emkay Global Financial Services | Buy | Target raised to ₹2,450 from ₹2,300

Emkay said SBI Life posted a healthy Q3FY26, led by APE growth, which was about ahead of its estimate, also VNB margin came in slightly above its estimate. Emkay attributed the resilience in margins—despite goods and services tax (GST) ITC losses—to strong growth in pure protection (non-ROP) and annuity segments.

 

It also noted that the annualised impact of GST ITC losses on VNB margin has eased to 150 basis points (bps) in 9MFY26, as against 175 bps in H1FY26, with management confident of reducing the full-year impact to 30–40 bps by end-FY26 through a favourable product mix and higher product-level margins. 

 

Reflecting Q3 developments, Emkay has raised APE estimates by 1 per cent, kept margin assumptions unchanged, and increased VNB estimates by 1 per cent for FY26–FY28.  ALSO READ | Q3 Results Today

Motilal Oswal Financial Services | Buy | Target raised to ₹2,570 from ₹2,470 

Motilal Oswal said SBI Life's Q3FY26 VNB margin was impacted by GST, but this was partially offset by strong traction in protection products, rising rider attachment rates, and a shift toward traditional products. Going forward, the brokerage expects sustained traction in non-linked products and further improvement in rider attachment to drive VNB margin expansion.

 

On growth drivers, Motilal highlighted that continued investments in agency and digital channels are expected to support overall growth, bolstered by a recovery in the bancassurance channel. The brokerage has largely maintained its APE and VNB estimates, factoring in a FY25–FY28 CAGR of 15 per cent and 16 per cent, respectively, with an operating RoEV of 18 per cent.

JM Financial Institutional Securities | Buy | Target: ₹2,420

JM Financial said a key highlight of Q3 results was the 24 per cent Y-o-Y banca growth in Q3, taking year-to-date growth in individual and total APE to 15 per cent  and 16 per cent, respectively, above the initially guided 13–14 per cent. On the back of this outperformance, the brokerage has raised FY26E/FY27E/FY28E EPS by 1 per cent/2 per cent/2 per cent, and now expects the full-year margin to be 27.3 per cent for FY26E (in line with the guided 26–28 per cent), gradually expanding to 28.5 per cent by FY28E.

 

Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers discretion is advised.