Life Insurance Corporation of India share price target

LIC has performed well with 9MFY25 VNB growth of 9.1% and H1FY25 EV growth of 24% YoY. Strategic initiatives have tracked well consistently in terms of pushing its product mix towards non-participating (28% of individual APE in 9MFY25 vs 18% in FY24 and 9% in FY23) and revision in pricing/product strategy to maximise value for all stakeholders with changes like hike in surrender value.

APE and net premium income declined 24% YoY and 11% YoY; renewal premium rose 4% YoY in Q3FY25

In 2QFY25, LIC reported net premium income of INR1.2t, up 12% YoY. For 1HFY25, net premium income grew 14% YoY to INR2.3t.

Life Insurance Corporation (LIC)’s 4QFY24 PAT grew 2.5% YoY to INR137.6b.
For FY24, LIC’s PAT rose 11.8% YoY to INR406.8b.

APE and net premium grew 11% and 16% YoY respectively in Q4; EV grew 25% YoY in FY24

LICI: Solid quarter; valuations overdone cut to HOLD. ALKEM: Good quarter; cut to SELL on stretched valuations. Monthly Chartbook: Fiscal consolidation to hold key. PWGR: In-line quarter, FY25 capex hiked; maintain BUY. TATACONS: Strong run continues. DIVI: Healthy margin recovery, heady valuations. TPW: Dull quarter; high valuations maintain HOLD. ESCORTS: Weakness persists - maintain SELL. TRCL: Tepid quarter, high capex overhang retain SELL. Metals & Mining: Ferrous read-across: Steel recovery in CY24 - ArcelorMittal

H1FY24 APE declined 10% YoY due to flat individual APE (up 20% ex-non-par) and a 25% drop in group business

LIC is treading well towards increasing VNB by pushing its product mix towards non participating (10.22% of individual APE in Q1FY24 vs 7.75% in Q1FY23), improving persistency and expansion in the distribution channels. Business strategy has dynamic methods like active repricing in many segments to gain market share while maintaining VNB growth targets as well as structural methods of increasing persistency and digital transformation.

Q1FY24 individual APE declined 8% YoY but non-par business grew 22% (constituting 10.2% of individual APE vs. 7.8% in Q1FY23)

LIC is treading well towards increasing VNB by pushing product mix towards non- participating segment (8.9% in FY23 individual APE mix vs 7.1% in FY22) and sharp focus on improving persistency (improvement in all cohorts except 25M in FY23).

APE grew 12.5% YoY in FY23 led by strong 36% growth in non-par products; non-par constituted 8.9% of APE vs. 7.1% in FY22

Extensive presence, brand equity and leadership in group life business serve as strong moats, supporting NBP market share of over 60%

LIC is treading well towards increasing VNB by pushing product mix towards non- participating segment (9.45% in 9MFY23 Individual APE mix). However, volume growth
has outperformed the industry in 10MFY23TD (25% YoY growth for LIC vs 19% growth for private insurers in terms of total weighted APE), especially in group segment (52% YoY growth in 10MFY23 vs 26% growth of private insurers in terms of group weighted APE).