Life Insurance Corporation of India (LIC) shares rose 2.23% after JPMorgan double-upgraded the stock to a target price, citing strong growth in Value of New Business (VNB) due to an improved product mix.
Share Price Movement
The share price of LIC went up by 2.23 percent to Rs. 939.8 per share on Tuesday, an increase from its previous close of Rs. 918.45 per share. The market capitalisation now stands at approximately Rs. 5,94,549 crore as of November 12, 2024.
What Happened
LIC’s stock rose 2.23% following upgrades from JPMorgan and Morgan Stanley. JPMorgan raised its target price to ₹1,075, citing strong VNB growth, while Morgan Stanley set a target of ₹1,120, driven by improved market share and cost efficiency. These upgrades boosted investor confidence and the stock price.
Q2 Financial Highlights
According to its recent filing, in the half year ending September 2024, LIC’s total premium income has increased by 14.07 percent YOY from Rs. 14,640 crore in Q2 FY24 to Rs. 16,700 crore in H2 FY25.
The company’s consolidated net profit has increased by 3.51 percent, from Rs. 17,469 crore in H2 FY24 to Rs. 18,082 crore in H2 FY25.
As compared to the last half-year results of 2024, the company’s AUM has increased by 16.78 percent from Rs. 47,43,389 crore to Rs. 55,39,516 crore.
Target price
JPMorgan: JPMorgan has upgraded LIC from “underweight” to “overweight,” raising its target price to ₹1,075 from ₹790, projecting a 14% potential upside. The broking cited sustained growth in LIC’s Value of New Business (VNB) due to an enhanced product mix and forecasts further VNB growth of 9% in FY25 and 11% in FY26.
Morgan Stanley: Morgan Stanley assigned an “overweight” rating to LIC with a target price of ₹1,120, indicating solid upside potential of 19.1%. The firm’s analysis highlighted LIC’s resilient market share and expanding premium revenue base. Morgan Stanley expects LIC’s improved cost efficiency and optimised asset allocation to drive profitability and long-term stability.
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Market Outlook
India’s insurance market is experiencing strong growth and is expected to become the world’s sixth-largest insurance market by 2032, moving up from its tenth position in 2022. Insurance premiums are projected to grow by 9% annually, with life insurance specifically positioning India as the fifth-largest market globally. This growth is driven by several factors, including strong economic growth, rising disposable income, young population, increased risk awareness, digital penetration, and favourable regulatory changes.
Shareholding Pattern
As of the November 2024 shareholding pattern, LIC Limited is primarily held by the promotors at 96.50 percent, foreign institutional investors hold 0.16 percent, and the public with 2.17 percent.
About company
Life Insurance Corporation of India (LIC) is a leading state-owned insurance company headquartered in Mumbai. Established in 1956, LIC is one of the world’s largest insurers, serving over 290 million policyholders. As a government-owned entity, it operates under the Ministry of Finance and provides diverse life insurance products.
LIC offers a wide range of services, including endowment plans, pension schemes, and health insurance. With assets under management of approximately ₹55 trillion, it holds a 62% market share in India. The company continues to dominate the Indian life insurance market with over 1.3 million agents and a vast network across both urban and rural areas. Its strong performance is evident from the 10.9% growth in premium income for FY 2023.
Looking ahead, LIC focuses on technological advancements to improve customer engagement and risk assessment. Its recent IPO in May 2022 raised ₹21,000 crore, further strengthening its financial position.
Written By Fazal Ul Vahab C H
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