A leading insurance provider known for its extensive portfolio and market dominance recently saw its shares surge nearly 9 percent post-Q4 results, despite mixed financial performance. Brokerages remain optimistic, highlighting improving margins and attractive valuations as catalysts for near-term growth. This article delves into the results, analyst outlook, and strategic drivers behind the bullish sentiment.
Life Insurance Corporation of India (LIC) Limited’s stock, with a market capitalisation of Rs. 5,90,754 crores, rose to Rs. 948, hitting a high of up to 8.8 percent from its previous closing price of Rs. 871.25. However, the stock over the past year has given a negative return of 8.5 percent.
Brokerage Outlook
Motilal Oswal
- Rating: Buy
- Target Price: Rs. 1,050 (Upside of 20%)
Rationale: Positive on increasing contribution from non-par policies, leading to improved value of new business (VNB) margin. Management’s optimistic outlook on premium growth also supported the bullish stance.
Macquarie
- Rating: Outperform (Upside of 39.4%)
- Target Price: Rs. 1,215
Rationale: While cautious on VNB growth, sees support from improving cost efficiencies and non-par product mix. Believes attractive valuation provides a cushion.
Goldman Sachs
- Rating: Neutral
- Target Price: Rs. 880
Rationale: Conservative view due to revenue miss in individual participating and group segments (down 16 percent YoY), along with distribution headwinds in the agency channel post new product launches.
Financial Highlights
In Q4FY25, the company reported revenue of Rs. 2,43,134 crore, up 1.7 percent YoY from Rs. 2,38,968 crore and 19.3 percent QoQ from Rs. 2,03,751 crore. Net profit surged 38 percent YoY to Rs. 19,021 crore from Rs. 13,784 crore and jumped 72.8 percent QoQ from Rs. 11,009 crore. Over the past three years, the company has delivered a robust profit CAGR of 127 percent, sales CAGR of 7 percent, and ROE CAGR of 63 percent, reflecting strong and consistent growth momentum.
In FY25, LIC recorded a total premium income of INR 4,88,148 crore, marking a 2.75 percent growth from INR 4,75,070 crore in FY24. The individual new business premium rose significantly by 8.28 percent, reaching INR 62,495 crore in FY25, up from INR 57,716 crore in FY24.
Despite the growth in individual business, LIC’s market share in premium declined by 1.82 percentage points, falling from 58.87 percent in FY24 to 57.05 percent in FY25.
Written By Fazal Ul Vahab C H
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