Shares of Life Insurance Corporation of India Ltd (LIC) will be in focus during the trading session on Friday after the company reported a mixed set of numbers in the June 2024 quarter. The state-run insurance major reported 9 per cent year-on-year (YoY) rise in its consolidated net profit at Rs 10,544 crore for Q1FY25, compared to a consolidated net profit of Rs 9,635 crore in the year-ago period.
Net premium income of LIC during the quarter increased 16 per cent YoY to Rs 1.14 lakh crore as against Rs 98,755 crore in the corresponding quarter of the previous year. In terms of market share measured by first year premium income (FYPI), LIC bragged 64.02 per cent overall market share and continued to be the market leader in Indian life insurance business, as per IRDAI.
On an annualised premium equivalent (APE) basis, the total premium was Rs 11,560 crore in the first quarter. Solvency ratio of the life insurer was at 1.99 per cent, while the gross non-performing asset quality (NPA) of LIC for the quarter was at 1.95 per cent. Persistency ratio for the thirteenth month was at 72.35 percent compared.
LIC had a market share of 39.27 per cent in individual business and 76.59 per cent in group business for the first quarter of the current fiscal year. The total individual business premium for the quarter ended June 2024 increased 7 per cent YoY to Rs 67,192 crore, while the Group Business total premium income for the quarter came in at Rs 46,578 crore, up 31 per cent YoY.
Shares of Life Insurance Corporation of India settled at Rs 1125.70 on Thursday, inching up marginally for the day. The total market capitalization of the company stood above Rs 7.12 lakh crore mark. The stock has nearly doubled investors wealth from its 52-week low hit in October 2023.
Brokerage firms Investec said that the earnings were miss on value of new business (VNB) margin led by product mix change. APE for the quarter was a beat of 13 per cent on estimates. Investec has maintained its hold rating on the stock with a target price of Rs 875 apiece.
Listed in May 2022, LIC is the largest insurance provider company in India. The company offers participating insurance products and non-participating products like unit-linked insurance products, saving insurance products, term insurance products, health insurance, and annuity & pension products.
LICI is currently demonstrating a robust recovery from the support levels of Rs 1070, which is close to its medium-term (50-day) EMA levels. This bounce back suggests resilience and indicates potential for further upward movement. It has recently crossed its short-term (20-day) EMA levels and is trading above all major moving averages, underscoring its current strength and bullish sentiment, said Sumeet Bagadia, Executive Director at Choice Broking.
"The stock has given a strong breakout from a falling trend line and has successfully retested the same levels, reinforcing the validity and strength of the breakout. The momentum indicator RSI has also bounced back and is currently trading at 55.49 levels, further supporting the bullish outlook," he said.
Investors and traders can consider this as a positive signal and anticipate potential upward movement in the stock. Buying the stock with a stop loss at the support level of Rs 1,070 and targeting higher levels of Rs 1,280 could be a prudent strategy given the current technical indicators and overall market conditions, Bagadia from Choice Broking added.
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