LIC Share Price Rises 5% after Q3 Results

Life Insurance Corporation of India (LIC) witnessed a surge in its share price soaring over 5% to hit fresh 52-week highs in morning trades on Friday driven by its Q3 results. The company's financial performance disclosed after market hours on Thursday driving LIC's market capitalization to surpass ₹7 trillion for the first time positioning it as the fifth most valued firm by market capitalization outpacing ICICI Bank.

Prime Minister's commendation on the company's performance further boosted investor confidence. LIC's journey of market dominance has been steady with recent milestones including surpassing State Bank of India (SBI) to become the country’s most valued PSU firm and achieving a market valuation of ₹6,99,702.87 crore. LIC's Initial Public Offering (IPO) came in May 2022, when the government divested a 3.5% stake and reduced its ownership to 96.5% LIC IPO received a strong response from investors.

Rising Stock Price and Financial Performance

LIC's stock has been on an upward trajectory gaining nearly 33% since the beginning of the year. Recent milestone of crossing the ₹1,000 mark for the first time highlights the market's confidence in the company's prospects. Since its listing LIC has delivered substantial returns to investors exceeding its issue price of ₹949 per share by over 20%. The company's financial performance in Q3 FY24 reflects its underlying strength. With a strong 49% yoy increase in net profit to ₹9,444.4 crore from ₹6,334.2 crore in the same period previous year.

During the October-December quarter of FY24, LIC witnessed growth across various financial metrics. Net premium income expanded by 4.6% to ₹1.17 trillion compared to ₹1.11 trillion in the same period last year. Additionally, the company reported a 12% yoy rise in net income from investments to ₹95,266.8 crore. LIC's strategic product launches including two new non-par and one ULIP product contributed to its growth trajectory. Analysts anticipate these initiatives to yield higher growth potentially enhancing margins for the company.

Despite a 32% yoy increase in management expenses LIC managed to maintain its operational efficiency and reduce gross non performing assets (NPA) to 2.15% in Q3 FY2024 from 2.43% in the previous quarter. The company's market share remained robust with 38.74% in individual business and 72.24% in group business for the nine months ending December 2023.

LIC's Assets Under Management (AUM) witnessed an increase reaching ₹49.66 lakh crore as of December 2023 reflecting an 11.98% yoy growth. The company's board proposed an interim dividend of ₹4 per share for FY24 record date set for 21 February 2024

Final Words

LIC's strong performance in the third quarter of the fiscal year 2024 showing solid growth in earnings and resilience in operations, confirms its position as a major player in India's insurance industry. With ongoing innovation and expansion of its product offerings investors can anticipate LIC to keep creating value consistently and maintain its leading position in the market for the foreseeable future.