SBI Life stock: Nomura keeps Buy as target falls to Rs 2,340

Published on 10/31/2026 at 00:41 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

Nomura keeps SBI Life stock as its top life-insurance pick after Q2. Higher rate assumptions weigh on valuation, while margins beat estimates.

Nomura stays positive on SBI Life

Nomura retained its Buy rating and top-pick status despite a lower valuation target.
SBI Life's Q2FY27 value-of-new-business margin exceeded Nomura's estimate.
Management reaffirmed its full-year individual annualised-premium-equivalent growth guidance, making the third quarter important for delivery.

SBI Life, INE918I01018, Illustration mit AI erstellt.

Nomura retained its Buy rating and top-pick status on SBI Life on Thursday, October 29, 2026, while cutting its target price from INR 2,440 to INR 2,340. Moneycontrol said the brokerage raised its risk-free-rate assumption, which reduced the valuation target even as its stock view remained positive.

Margins support the investment case

SBI Life's value-of-new-business margin reached 29.2% in the September quarter, beating Nomura's estimate by 50 basis points. Moneycontrol reported that the margin would have been 30% excluding the impact of goods and services tax.

Annualised premium equivalent grew 7.4% year on year in the quarter, led by non-participating products, annuities and individual protection. Nomura expects annualised premium equivalent to grow 16% and value of new business to rise 17% in fiscal 2027.

Growth guidance faces a key test

Individual annualised premium equivalent growth was 12% in the first half of fiscal 2027, below SBI Life's full-year guidance of 14% to 15%. Management reaffirmed that outlook and expects the third quarter to benefit from seasonally stronger bancassurance activity.

Nomura expects value-of-new-business margins between 26% and 29% in the third and fourth quarters, with a full-year margin estimate of 27.6%. It also noted that non-participating and annuity products could support demand as benchmark yields rise.

Regulation remains a valuation risk

Nomura rolled its valuation forward to September 2027 and raised its risk-free-rate assumption to 7.25% from 6.25%, taking its cost of funds to 13.9%. The brokerage also flagged the risk that lower commission structures under proposed distribution reforms could intensify competition in SBI Life's home market.

SBI Life Insurance Company Limited is headquartered in Mumbai and operates in life insurance. Its investor-relations page identifies the company as a separate legal entity from State Bank of India.