LIC Shares Surge 5% Following 23% Rise in Q4 Net Profit; JM Financial Increases Target Price

Life Insurance Corporation of India Sees 23% Rise in Q4 Net Profit

India's largest insurer, the Life Insurance Corporation of India (LIC), reported a 23% rise in its Q4 net profit, driven by strong group business growth and continued momentum from last year's GST cuts. The state-owned LIC's net profit rose to Rs 23,420 crore for the three months ended March 31, up from Rs 19,013 crore a year earlier.

Net premium income grew 11.5% to Rs 1.65 lakh crore, while one-time premiums rose 21.5%, and first-year premiums from new policies rose around 17%. The annualised premium equivalent sales, a key measure of new business, rose nearly 22% to Rs 22,954 crore for the quarter, swinging back from a year ago's poor sales that were hit by regulatory changes.

Key Developments

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The insurer continued to increase its focus on non-participating products, where policyholders don't receive profit-linked bonuses, which helped improve profitability. The value of new business, which reflects expected profit from new policies, rose 67% to Rs 5,891 crore. Margins on new business stood at 21.2% as of March-end compared with 17.6% a year earlier, supported by a higher contribution from non-participating products.

Brokerages raised target prices of the stock, with JM Financial increasing its target price amid "another strong quarter" for LIC. Brokerage firm Bernstein also raised its target price to Rs 900, while Citi gave a 'Buy' rating with a target price of Rs 1,475.