Life Insurance Corporation of India (LIC) is an Indian public sector life insurance company headquartered in Mumbai. It is India’s largest insurance company as well as the largest institutional investor with total assets under management worth ₹41 trillion as of May 2022. It is under the ownership of Government of India and administrative control of the Ministry of Finance.
The Life Insurance Corporation of India was established on 1 September 1956, when the Parliament of India passed the Life Insurance of India Act, nationalizing the insurance industry in India. Over 245 insurance companies and provident societies were merged together. It is ranked 98th on the 2022 Fortune Global 500 list with a revenue of ₹775,283 crore and a profit of ₹4,415 crore.
Quarterly Growth Walkthrough
LICI registered a 13% growth in its consolidated net sales from operations at Rs 196,958 crore in the third quarter from Rs 174,270 crore in December 2021.
The consolidated net profit was at Rs 6,334 crore in December 2022 which is a big spike up of 2600% from Rs 235 crore which was reported in December 2021.
EBITDA was computed at Rs 13,722 crore in December 2022 which is a big jump up of 10882% from Rs 125 crore in December 2021.
Insurance companies are compared on top-line growth through a technical term which is the total annualised premium equivalent (APE). It is measure of ascertaining business sales in the life insurance industry. LIC’s APE which is computed as the sum of annualised first-year premiums on regular premium policies, and 10 percent of single premiums written, was registered at Rs 37,545 crore in 9M FY23. This is a healthy growth of 25 percent compared to 9M FY22.
LIC’s AUM (assets under Management) have increased to Rs 44,34,940 crore as on December end, registering an increase of 11 percent YoY.
While the operating expense ratio inched up in 9M FY23, the commission ratio for 9M FY23 has reduced to 5 percent from 5.53 percent in 9M FY22.
LIC’s total exposure to the Adani group companies (under equity and debt) stands at Rs 35,917 crore as on December and the market value of the same was Rs 56,142 crore (at the close of market hours on January 27, 2023.
LICI stock price has been under a freefall since the launch of its IPO and the price continues to face selling pressure. The stock has recently made a new low of Rs 582. Considering the strong quarter, the price may pick up the bullish pace. The MFI on weekly chart is at 33 points which makes the stock considerably oversold. A long trade can be initiated into this stock with a stop loss as per the trader’s risk management and a target in the range of Rs 700 to Rs 750.
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