SBI Life shares – Will the high valuation turn out to be justified?
By Ankur Chandra | Updated at: Dec 4, 2025 12:32 PM IST
SBI Life Insurance Company (SBI Life) shares are gaining today. At 11:15 a.m. IST, 4th December, 2025, its stock price is up by 1.41%, trading at Rs 2000.60. Nifty 50 index is up by 0.34% at this time. The gains today are being seen after some short term profit booking in the stock in the past 5 days. The stock lost more than 0.30% over the past 5 days.
SBI Life one of the best performing stocks of 2025
SBI Life is one of the best performing stocks of 2025, till date. Year-to-date (YTD) in 2025, the stock’s price has gained 42.92%. Nifty 50 index has gained 9.82% in this period. SBI Life shares have outperformed the Nifty 50 index by around 33% this year.
Nifty Financial Services Ex-Bank index has gained 28.04% YTD in 2025. SBI Life shares have outperformed this index by around 14% this year. SBI Life’s stock is a constituent of this index. It has 5.18% weight in the index.
The company is a beneficiary of new GST rate structure
SBI Life shares started gaining since April this year. The company is a beneficiary of the new GST rate structure. This structure came into effect on 22nd September, 2025. GST rate on individual life insurance premium has been reduced to 0% from 18%, under the new GST structure. This makes life insurance cheaper for end customers. This in turn is expected to give a boost to demand for life insurance policies.
In the most recent September quarter, value of new business premium of the company increased year-on-year by 16.7%. Value of new business premium is the amount of premium that it collected from the new insurance policies that it sold in the quarter.
Stock may be overvalued in spite of growth prospects
SBI Life’s shares are currently trading at a 12-month trailing price-to-earnings (P/E) ratio of 81.83. Stocks that make up Nifty Financial Services Ex-Bank index are currently trading at an average P/E ratio of 24.43. That makes SBI Life shares very expensive in terms of valuation. How long this rally in its shares will continue may be a thing to watch out for. With the kind of competition that is there in the life insurance market in India, it may be challenging to fulfill the growth expectations implied in the high valuation of SBI Life shares.
Disclaimer : This content is only for informational purpose. It does not make any recommendation to act or invest.
Source: NSE, SBI Life
