LIC Q4 earnings exceed expectations, brokerages predict 30% stock rise
Life Insurance Corporation (LIC), India's largest insurer, has reported a better-than-expected performance for the January-March quarter of fiscal year 2024. This positive outcome has led brokerages to maintain an optimistic outlook on the company's long-term prospects. Analysts at JPMorgan have maintained an 'overweight' rating on LIC, predicting a potential upside of nearly 30% from current levels.
Analysts predict strong business growth for LIC
Analysts at JPMorgan stated, "We believe that LIC stock is inexpensive and there is further room for strong business growth. The market seems to take market share gains as a key catalyst for the stock." Meanwhile, Citi analysts have issued a 'buy' call for LIC with a target price of ₹1,295 per share, indicating an upside of 25% from current levels. They are awaiting further clarity on the movement between mark-to-market and core embedded value for FY24.
LIC's Q4 results show marginal profit increase
In the fourth quarter of FY24, LIC's net profit rose marginally by 2.5% year-on-year to ₹13,762 crore. The value of new business also increased by 4.6% YoY to ₹9,583 crore. The insurer sold a total of 2.03 crore policies in the individual segments compared to 2.04 crore policies sold in FY23, indicating a slight decrease in policy sales.
LIC reports significant asset growth and improved quality
LIC's assets under management (AUM) witnessed a significant increase of 16% YoY to ₹51.21 lakh crore in Q4FY24. The company also reported an improvement in asset quality during the final quarter of FY24 with its gross non-performing asset (GNPA) standing at 2.01% against 2.56% in the year-ago period, indicating a reduction in bad assets. The insurer announced an interim dividend of ₹6 per share for this period.
