SBILIFE Q2 FY27 Earnings Call: Reaffirms 14-15% IRP Growth Guidance, VNB Up 19% On Mix Shift

SBILIFE held its Q2 FY27 earnings call on October 27, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Strong H1 Profitability, Boosted by GST Tailwind

• H1 FY 2026-2027 PAT of Rs.12.7 billion (+17% YoY) — management quantified the GST impact at Rs.5.3 billion; PAT excluding GST was Rs.16.9 billion (+39% YoY). Solvency ratio stood at 1.97 vs the 1.50 regulatory requirement.
• VNB of Rs.32.7 billion (+19% YoY) — VNB margin was 27.9% for H1 FY 2026-2027 and 29.3% for Q2 FY 2026-2027; excluding GST, VNB would have been Rs.33.8 billion (+19.4%) with margins of 28.8% (H1) and 30% (Q2).
• Embedded value of Rs.873.5 billion (+15% YoY) as of September 30, 2026, with operating return on embedded value at 18.8%; AUM at Rs.5.3 trillion (+9% YoY).
• Total APE of Rs.117.5 billion (+18% YoY) in H1 FY 2026-2027; total new business premium Rs.202.6 billion (+10%), gross written premium Rs.484 billion (+13%), renewal premium Rs.281.5 billion (+15%, 58% of GWP).
• Cost ratios rose YoY — OPEX ratio at 6.9% (vs 6.2% in H1 FY 2025-2026) and total cost ratio at 11.7% (vs 10.9%); excluding the GST impact, OPEX ratio was 5.8%, in line with the prior-year period.
• Quality metrics held firm — 13th/25th/49th-month persistency at 87.6%/78.4%/69.3%, improving 44/110/40 bps YoY; death claim settlement ratio 99.1%; mis-selling ratio 0.035%.

FY27 IRP Guidance Reaffirmed Despite Q2 Softness

• FY 2026-2027 IRP growth guidance of 14-15% reaffirmed — MD & CEO Amit Jhingran said H1 FY 2026-2027 IRP growth was around 12% and the company is "very sure" of closing the year at the guided level notwithstanding quarter-to-quarter variation.
• Q2 FY 2026-2027 was slightly subdued — Q1 FY 2026-2027 delivered 15%+ growth; management expects higher growth in Q3 FY 2026-2027 consistent with historical Q3 seasonality, but declined to disclose October month-to-date figures.
• Growth is currently at the same level as the industry's in H1 FY 2026-2027, per management, which had earlier indicated growth would be better than industry growth.
• VNB margin guidance of 26-28% reaffirmed — despite margins currently running above that range (per the analyst's framing), the MD & CEO said the company will "stick to our guidance of 26-28%" and monitor H2 FY 2026-2027; the Appointed Actuary said the range is retained for pricing flexibility.
• Management declined a channel-wise APE breakdown for FY 2026-2027, saying the mix depends on market conditions and channel response; the analyst cited banca growth of ~9% and agency ~12% in H1 FY 2026-2027.

ULIP Mix Shift on Track; Non-par Repricing Continues

• H1 FY 2026-2027 closed at ~62% ULIP / 38% non-ULIP — versus the FY 2025-2026 close of 66%/34% and the FY 2026-2027 budget target of ~63% ULIP, leaving a 1% cushion entering H2 FY 2026-2027; management expects to broadly achieve the FY 2026-2027 mix direction.
• Guaranteed non-par savings grew 27% to Rs.24.7 billion in H1 FY 2026-2027; group protection APE rose 134% to Rs.16 billion; individual protection APE grew 16% to Rs.4.3 billion; annuity/pension new business was Rs.46.2 billion.
• Non-par repricing will continue through Q3 and Q4 FY 2026-2027 — the Appointed Actuary said the company will keep refining/repricing products as part of its value-optimization strategy; in Q2 FY 2026-2027 it revised the return to the customer on non-par products, passing on some benefit to customers.
• Deferred annuity launch expected "hopefully" within Q3 FY 2026-2027 — positioned as margin-accretive with margin expected similar to, or possibly higher than, the company's target margin; no volume guidance provided.
• Q2 FY 2026-2027 annuity growth of 28% came from the existing portfolio; the H1 FY 2026-2027 VNB margin benefit of +80 bps was a combined product-mix effect (some GTI impact plus annuity and non-par contributions), while the Q1 impact of -60 bps was mainly due to a higher share of group (GTI) business.
• Management gave no numeric long-term traditional mix target — it steers only at the ULIP vs non-ULIP level, goes by customer preference and avoids micro-segmentation.

Banca Leads, Agency Slows, "Others" Surge

• Banca contributed 53% of total APE in H1 FY 2026-2027 (SBI + RRBs; >64,000 CIFs), with individual APE of Rs.59.9 billion (+10%); SBI branch productivity at Rs.5 million in individual APE terms.
• Agency individual APE grew 12% to Rs.32 billion in H1 FY 2026-2027 with agent productivity ~Rs.2 lakh, >72,000 gross agent additions and 14 new branches; agency growth slowed to ~6% in Q2 FY 2026-2027 from ~23-24% in Q1, though management expects a return to normal growth over the next couple of months (FY 2026-2027).
• Other channels grew 67% to 19% of total APE in H1 FY 2026-2027 (direct, corporate agents, other banks, brokers, online, web aggregators); institutional alliances (other bank channel) grew 30%+, led mostly by public sector banks and concentrated in the non-par segment.
• J&K Bank added as a new banca partner in Q2 FY 2026-2027 and has started selling products; the "others" channel growth is driven by a low base and good direct-channel response.
• Margin profile is uniform across channels — management pays uniform commissions to agency, banca and other bank distributors; all products are uniformly priced with no channel-wise differentiation in guaranteed IRR.
• Credit life APE stood at ~Rs.140 crore in H1 FY 2026-2027 (group protection), roughly flat versus the prior period; the product is optional rather than bundled, with an attachment rate of around/just under 50% in the bank portfolio.

Distribution Reforms, Commission Cap and IFRS Transition

• IRDAI's consultation paper on recalibrating distribution economics termed a constructive step — the MD & CEO called it a "conceptually and directionally, very good step" by the regulator, supporting the regulator's and the government's vision of "insurance for all by 2047"; final guidelines are awaited and SBI Life expects limited impact as its existing structure is broadly aligned with the proposed framework.
• SBI Life "best placed" under the proposed new distribution norms — the CEO said the company will change products and its OPEX/commission structure in line with the regulator's guidelines as and when they come into effect, and the reforms may open up more opportunities.
• Credit life commission cap has no current impact — management stated credit life has little partnership beyond SBI, so the proposed cap (analyst-cited at around 2% or 2.5% for lender commission) does not impact SBI Life at this moment; it will first await the shape the consolidation paper takes as a regulation.
• IFRS/Ind AS transition on the IRDAI mandate timeline — the CFO said the company is under the IRDAI forbearance period; the transition approach for the in-force book and opening CSM split remain under evaluation, to be finalized by end-March 2027 (end of FY 2026-2027), with adoption targeted for June 30, 2027 (Q1 FY 2027-2028).
• Investor education session on IFRS planned — management committed to holding a session ahead of adoption, to be planned by end of FY 2026-2027; it declined to specify whether ULIP CSM will be released on a sum-insured or fund-value basis.

Positive EV Variance Defended; Conservation Ratio Disputed

• Positive operating experience variance is deliberate — Appointed Actuary Pritesh Choubey attributed it to retaining long-term sustainable assumptions, the reason the company "always" outperforms on the EV side; he expects the positive operating variance and better ROEV to continue.
• No assumption changes in H1 FY 2026-2027 — the negative operating assumption impact in the VNB walk stems from refinements made in March 2026 (FY 2025-2026) covering mortality, persistency, expense and other assumptions, flowing through the September 2025-to-September 2026 comparison.
• Yield curve contributed a 70 bps VNB margin uplift in the H1 FY 2026-2027 vs H1 FY 2025-2026 comparison; VNB is computed using the prevailing yield curve month-on-month, while operating assumptions are revised only once a year at March.
• Conservation ratio dispute — analyst Vinod Rajamani (Nirmal Bang) flagged a fall to ~82% from 84% in Q2 FY 2026-2027, sharpest in linked pensions; management disputed the fall, stating the ratio is flattish, 13th/25th-month persistency are very good, and renewal collections are growing at higher double digits in Q2 FY 2026-2027.
• Hedging policy at 80% of premium — management considers 80% the optimal hedging ratio at the current point in time.
• Outlook — management sees India's resilient economy and rising household aspirations as a sound foundation for the sector's long-term growth; short-term market volatility is unlikely to materially alter underlying growth drivers, though it may influence customer product preferences.