SBI Life Insuran (SBILIFE)

FairStock Score: 51/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• Zero debt and 16.88% ROCE show a conservative balance sheet
• Piotroski F-Score of 8/9 indicates strong financial health
• Promoter holding of 55.33% aligns owner interests
• ROE of 14.60% and free cash flow of ₹3,758 Cr show capital generation

Concerns

• P/E of 82.42 and P/B of 10.79 are extreme relative to 2.85% profit growth
• No margin of safety: Graham number ₹307.21 and DCF value ₹482.34 vs price ₹1,827.45
• Sales growth of just 0.96% and latest quarter net margin is thin: ₹577 Cr on ₹46,133 Cr sales
• Dividend yield of 0.13% and PEG of 8.89 make the valuation hard to justify

AI Analysis

I have always asked three questions: Is it a good business? Is it run by good stewards? Is the price fair? SBI Life passes the first two, but fails the third badly. Returning 14.60% on equity with 16.88% ROCE and a completely clean balance sheet — zero debt — is respectable. A Piotroski score of 8 out of 9 tells me the financial health is strong, and free cash flow of ₹3,758 Cr gives the company flexibility. Promoter holding at 55.33% also aligns interests reasonably. But I never pay any price for quality. The stock sells at ₹1,827.45 with a P/E of 82.42 and P/B of 10.79. Even if I assume this business keeps grinding along, profit growth is just 2.85% and sales growth under 1%. A PEG ratio of 8.89 is absurd. The Graham number is ₹307.21 and the DCF intrinsic value is ₹482.34 — both far below the market price. There is no margin of safety; there is a negative margin of safety at -563%. Dividend yield of 0.13% means the shareholder gets almost no income while waiting. The latest quarter shows net profit of ₹577 Cr on sales of ₹46,133 Cr — a thin margin and no meaningful growth. This is not a terrible business. A 14.60% ROE with zero leverage is decent. But Mr. Market is pricing it like a fast grower while the numbers show a slow grower. In Graham's language, price is what you pay, value is what you get. SBI Life's price includes a promise of future perfection. I prefer a margin of safety in the present. At this price, I would wait and watch, not buy. If growth accelerates and valuations cool, it becomes more interesting. Until then, I respectfully pass.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer