SBI Life Q4 FY26: Profit dips 1%, premiums rise 16%

SBI Life shares in focus after Q4 earnings

SBI Life Insurance Company is set to stay on investors’ radar after reporting its Q4 FY26 results, which showed a marginal year-on-year decline in profit alongside strong premium growth. The insurer reported a 1.09% YoY fall in net profit to Rs 804.64 crore for the January-March quarter, compared with Rs 813.5 crore in Q4 FY25. Even as profit was softer, net premium income rose 16% YoY to Rs 27,684 crore, supported by demand across segments after GST reforms.

Brokerages including Nomura, HDFC Securities and Nuvama retained ‘Buy’ ratings, arguing that operating metrics and medium-term margin guidance remained steady despite near-term softness in APE and VNB. The stock reaction was cautious initially, but the broader set of commentary stayed focused on long-term growth visibility.

Q4 FY26 results: Profit down, premiums up

The quarter presented a mixed picture: profit slipped, but premium collections were strong. Net premium income increased to Rs 27,684 crore in Q4 FY26 from Rs 23,860.7 crore a year ago. Annualised premium equivalent (APE) rose 5.5% YoY to Rs 5,750 crore, though it was described as below expectations.

Value of new business (VNB) declined to Rs 1,630 crore from Rs 1,670 crore in the year-ago quarter. VNB margin contracted to about 28.35%-28.4% from roughly 30.5%-30.6% in Q4 FY25, reflecting pressure on margins during the quarter.

APE and VNB: Growth lagged expectations

Broker commentary flagged that APE growth, while positive, was weaker than anticipated. Nuvama described Q4 performance as muted with total APE growth at 5.5% YoY. It added that individual APE grew 7.8% YoY, while group APE declined 13.8% YoY.

Nuvama also noted that VNB came in below estimates and pointed to a sharp fall of around 54% YoY in group protection, which weighed on overall group business growth. Separately, HDFC Securities referred to APE and VNB growth coming in at 13% and 14% YoY, respectively, slightly below expectations.

Margins, solvency and persistency indicators

SBI Life’s solvency ratio stood at 190% in Q4 FY26, down from 196% a year earlier, but still above regulatory requirements. Persistency data in the report showed a mixed trend: the 13th month persistency ratio was 87.89% versus 86.65% YoY, while the 61st month persistency ratio was 56.70% compared with 62.06% YoY.

HDFC Securities said margins were impacted by around 150 basis points due to GST input tax credit, partly offset by a higher non-par product mix. Another set of analysts noted that the Q4 VNB margin impact from GST changes was partly offset by protection traction, rising rider attachment, and a shift in product mix toward non-ULIP products. The commentary also highlighted that ULIP mix continues to decline as the company shifts toward higher-margin traditional products.

FY26 snapshot: Profit growth and key scale metrics

On a full-year basis, SBI Life reported standalone net profit of Rs 2,470.3 crore in FY26, up 2.36% YoY. Net premium income for FY26 rose 18.91% YoY to Rs 99,955.92 crore.

The company reported FY26 APE of Rs 24,270 crore, up 13% YoY, and value of new business (VoNB) of Rs 6,670 crore, up 12% YoY, with a margin of 27.5%. Embedded value was reported at Rs 80,790 crore, up 15%, while operating return on embedded value (RoEV) was 19.7%. Assets under management (AUM) were reported at Rs 490,000 crore, up 9%.

Stock move: Early pressure after results

The stock came under pressure after the results were released after market hours. SBI Life shares slipped about 3% intraday on BSE to a low of Rs 1,827.05 per share. By 9:48 AM, the stock had recovered some ground and was trading 0.3% lower at Rs 1,879.10 per share.

On the prior trading day, SBI Life ended 1.40% lower at Rs 1,884.80, compared with a 0.81% decline in the NSE Nifty 50. The BSE Sensex was down 0.67% at 77,989.69 during the morning trade cited in the report.

Nomura: Buy retained, target trimmed to Rs 2,440

Nomura maintained a ‘Buy’ rating but trimmed its target price to Rs 2,440 from Rs 2,445. The revised target implied an upside potential of more than 29% from the previous closing price of Rs 1,884.80 on NSE.

Nomura said SBI Life managed well in a tough year and highlighted that management is aiming for 14% APE growth in the near term. It also flagged FY26 VNB margin at 27.5%, 10 basis points ahead of its estimates and at the upper end of the 26%-28% guidance. For FY27, management guided to a 27%-28% VNB margin, with product and customer profile enhancements expected to support margins.

Nomura pointed to a positive operating variance of 1.82% (of opening embedded value) in FY26, supported by better-than-expected mortality and persistency trends. It also said its target price cut was driven by a 3% miss on economic variance.

HDFC Securities and Nuvama: Buy calls maintained

HDFC Securities maintained a ‘Buy’ rating with a target price of Rs 2,400 per share, implying an upside of more than 27% from the previous close. It highlighted return on embedded value at about 20%, supported by favourable experience variance. The brokerage also cited SBI Life’s distribution strength through SBI as a key advantage and revised growth estimates to a 14%-15% CAGR over FY26-28, valuing the stock at 2.1x March 2028 estimated embedded value.

Nuvama maintained a ‘Buy’ rating with a target price of Rs 2,390, implying nearly 27% upside from the previous closing price. Its note emphasised muted Q4 APE growth and weakness in group segments, including a sharp decline in group protection, which affected overall growth.

Key numbers at a glance

Brokerage targets and implied upside

Why the results matter for investors

The quarter underscored a familiar trade-off for life insurers: premium momentum remained healthy, but new business profitability and mix shifts can create short-term volatility in APE, VNB and margins. In SBI Life’s case, brokerages focused on the company’s ability to sustain guided VNB margins, and on operating variance remaining positive in FY26 when peers reportedly faced pressure from persistency-driven assumptions.

At the same time, the Q4 margin contraction and weaker APE versus expectations are immediate datapoints investors will track, especially as distribution and product mix evolve. Management’s near-term APE growth aim of 14% and FY27 VNB margin guidance of 27%-28% will likely be central to how the market frames the next few quarters.

Conclusion

SBI Life reported a marginal decline in Q4 FY26 profit, but premium growth and several operating indicators kept major brokerages constructive on the stock. With ‘Buy’ ratings intact and margin guidance reiterated for FY27, investors will watch for APE recovery, group business stabilisation, and follow-through on the targeted growth and margin range.