Shares of India’s largest insurance company closed at a price of Rs 548.30. The scrip was down around 0.20 percent as compared to the previous closing price of Rs 549.40. The stock is trading closer to the 52-week low level of Rs 530.05.
As per the data published by Life Insurance Council, the total premium collected by LIC grew 16.67 percent to Rs 2.32 trillion from Rs 1.99 trillion for fiscal 2022-23. On the basis of sheer volume, the insurance giant reports the highest numbers and in terms of premiums that are collected, LIC continues to hold a market share of approximately 63 percent as on March 2023.
Established in 1956, the Life Insurance Corporation of India (LIC) is an insurance company that primarily provides life insurance products including pension plans, health plans, and group insurance schemes. The assets of the corporation are managed by the executive management team.
Having a quick glance at the financials of the company, the numbers reported have shown a reduction as far as the revenues and net profits are concerned. The revenues have fallen from Rs 1,32,632 crores in Q2 to Rs 1,12,297 crores in Q3. Moreover, the net profit numbers have reported a downfall from Rs 15,313 crores to Rs 7,397 crores during the same period.
The profitability ratios have shown mixed results with the return on equity (ROE), on one hand, reducing from 74.46 percent during FY20-21 to 45.16 percent in FY21-22 and the return on capital employed (ROCE), on the other hand, showed a huge amount of growth from 2.28 percent during FY20-21 to 45.59 percent in FY1-22.
BOB Capital Markets gave a ‘Buy’ tag to the company with a target price of Rs 800 indicating an upside of around 46 percent as compared to the current price levels.
The rationale behind giving such a recommendation is the adequate solvency ratios, robust claim settlements, and vast agency channel being the company’s moat.
As per the latest data available for the March quarter, promoters of the company hold a constant 96.5 percent stake, whereas, the Foreign Institutional Investors (FIIs) reduced their stake from 0.17 percent during the December quarter to 0.08 percent in the March quarter.
Written by Amit Madnani
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