SBI Life Insurance (SBI Life), is one of the most prominent life insurance companies in India. But amid rising inflation in all segments, SBI life share price has been stagnant for the past few months.
SBI Life Insurance
SBI Life Insurance is one of the most well-known providers of life insurance in India (SBI Life). It started its first journey in October 2000 and was accredited by the Insurance Regulatory and Development Authority of India (IRDAI) in March 2001.
It gives protection, pension, savings, and health solutions to both individual and group customers, serving millions of families across India.
Also, it consistently upholds high ethical standards while adopting a “Customer-First” philosophy. SBI Life puts a strong focus on maintaining world-class operational effectiveness and giving its clients a stress-free claim settlement experience.
SBI Life also commits to improving digital experiences for all of its stakeholders, including customers, workers, and distributors.
The competitors of SBI Life Insurance
There are a number of insurance companies that compete with SBI Life Insurance and offer world-class services to its clients. And they are as follows:
- HDFC Life Insurance Company Ltd
- ICICI Prudential Life Insurance Company Ltd
- Life Insurance Corporation of India
- Max Financial Services Ltd
What is the market share of SBI Life?
SBI Life Insurance is ranked second in terms of market capitalization when compared to its competitors. In terms of market capitalization, the Life Insurance Corporation of India (LIC) holds the top spot.
| Basic Industry | Life Insurance |
| Sectoral Index | NIFTY FINANCIAL SERVICES |
| Sectoral Index P/E | 19.04 |
| Mkt Cap (Rs. Cr.) | 122,852 |
| Dividend Yield | 0.16 |
| Sector PE | 94.57 |
| Book Value Per Share | 116.14 |
In 2022, the company collected new business premiums totaling 254.57 billion rupees, of which 133.92 billion came through Bancassurance, the company’s largest distribution network, 46.17 billion from Retail Agencies, and 74.48 billion from other sources.
Why are the shares of SBI Life falling
The share price performance of the majority of insurance businesses in 2022 has not been good, even SBI Life Insurance, which has increased its share price by roughly 4% annually. Despite the fact that Indian benchmark indices reached 52-week highs, these stocks were just underperformers throughout the year.
The bulk of Indian life insurance companies saw a fall in their share values as a result of growing inflation and unfavorable global trends. These stocks were also primarily influenced by a record U.S. dollar index and Fed rate hikes.
The highest 10-year bond yields in 14 years were also the reason for the weakness in the stocks. Inflation rates significantly increased in the first half of this year as a result of the increasing price of crude oil.
Obviously, individuals hesitate to spend money on things like insurance when inflation is high. Investors discovered other financial equities to be more secure than insurance companies. That had a negative impact on the price of insurance stocks.
Large institutional investors were compelled to switch from insurance stocks to other better-performing, high-momentum equities of large banks and consumer goods due to uncertainty in the global financial markets. Additionally, according to the valuation of the insurance stocks, the risk-to-reward ratio was not favorable for investors.
SBI Life Share Price Analysis
SBILIFE: SBI Life Insurance share price in NSE
| 52 Week High | 1,339.55(08-Sep-2022) |
| 52 Week Low | 1,003.50(08-Mar-2022) |
| 50 Day SMA | 1,254.76 |
| 100 Day SMA | 1,238.62 |
| 200 Day SMA | 1,172.49 |
SBI Life’s QoQ and YoY growth rates were significantly higher than those of the other group companies. Even though we can see from the one-year chart that SBI Life’s share price has never accurately reflected its underlying growth.
Its high for the year was 1340.35, and its low was 1003.50. It is still 8% below the top it attained this year even if it is trading 22% higher than its 52-week low.
The interesting fact is that it only provided a flat 4% return in a year. When compared to the benchmark index NIFTY 50, the share price of SBI Life is slightly higher than the index.
The 50-day, 100-day, and 200-day simple moving averages (SMA) comparison show that the price of SBI Life stock(NSE CMP-1229.05) is still in the short- to medium-term bearish range.
The current market price of SBI Life share is fairly above the 200-day simple moving average. So, there is no reason to be alarmed over a longer period of time.
If we closely examine the share price of SBI Life on the 1-year chart, it is clear that there was a trading gap at 1200. The following support level on the bottom side next to the gap will be the 200-day SMA at 1172.49.
The chart structure doesn’t seem to be one that should encourage buyers to initiate fresh trades when there are enough strong stocks to make longs.
The chart’s rounded top pattern can point to weakness below the current level also. Before the stock price breaches the 50-day and 100-day SMAs on a closing basis, we cannot foresee a sizable recovery in the stock price of SBI Life.
Is SBI Life share a good buy?
As of right now, the share price of SBI Life is clearly indicating a decline throughout multiple time intervals, including daily, weekly, and monthly. We have observed numerous similarities in the multiple time frames.
So there is a greater likelihood that the stock will continue to decline before making a significant comeback.
On the chart, even other leading indicators clearly demonstrate weakness. Consequently, investors must now watch and wait for a decline toward the gap near 1200 or the 200-day SMA close to 1170 in order to buy SBI Life shares.
Alternatively, one must wait for the confirmation breakout of SBI Life share price above its short-term moving averages before placing bullish bets.
However, for someone who enjoys trading short, this stock has provided excellent returns in the last few months.
Should investors panic about the falling SBI Life share price
There is still broad consensus among major institutions that the share price of SBI Life will increase. The majority of prominent institutions continue to advise owning the stock. We do not believe there is cause for concern if global markets rise in the upcoming months and inflation continues to decline.
Unless there is turmoil in the domestic or international markets, the stock can respect the critical support levels. The stock price may rise above 1550 in the months ahead, according to research forecasts from several brokers.
