LIC shares rise 4% as Q4 profit jumps over five-fold

Shares of Life Insurance Corporation (LIC) of India rose nearly 4% in opening trade on Thursday after the country’s largest life insurer reported five-fold growth in its net profit for the March quarter of 2023. The board of the state-owned company also declared a final dividend of ₹3 per share for the financial year ended March 31 as compared to ₹1.5 paid in the previous fiscal.

LIC shares opened 1.8% higher at ₹604 against the previous closing price of ₹593.55 on the BSE. Extending opening gains, the largecap stock surged 3.7% to ₹615.65 in the first half an hour of trade so far, while the market capitalisation climbed to ₹3.84 lakh crore. The stock touched a 52-week high of ₹841 on May 25, 2022, and a 52-week low of ₹530.20 on March 29, 2023.

The insurance giant has delivered a negative return of 26% in a year and 3% in six months. Over the last month, the counter has risen nearly 11% and 7% in a week.

For the January-March quarter of 2023, LIC of India posted 447% growth in consolidated net profit at ₹13,191 crore as compared to ₹2,409 crore in the same quarter of last year. Sequentially, the profit grew 108% from ₹6,349 crore in Q3FY23. The jump in fourth-quarter profit was aided by the recognition of a gain due to changes in its accounting policy. The insurer moved nearly ₹7,300 crore to a shareholders' fund that boosted its bottom line.

The consolidated net premium income dropped 8.27% to ₹1,32,223 crore in Q4FY23 from ₹1,44,159 crore in the corresponding quarter of the previous fiscal. On quarter-on-quarter (QoQ), net premium income rose 17.7% from ₹1,12,297 crore in December 2022 quarter.

For the full financial year, the profit after tax (PAT) was ₹36,397 crore as compared to ₹4,043 crore in the previous fiscal. “The profit for FY23 comprises of an amount of ₹27,240.75 crore (net of tax), which is pertaining to the accretion on the Available Solvency Margin, transferred from Non Par fund to shareholders account,” LIC said in its earnings release.

Siddhartha Mohanty, Chairperson, LIC said, “Our results demonstrate the resilience of our business, built in every nook and corner of the country, over a period of more than six decades. Our efforts towards enhancing the share of non par products in the overall product mix are bearing fruits. With the increase in profit, net VNB margin and IEV we are well positioned to continue our growth journey, in the service of the nation and its citizens.”

“The regulatory initiatives towards insurance for all by 2047 will present opportunities to grow for the sector and we intend to participate in that growth. As we move forward to grow our business further, we will endeavour to create superior value for all our stakeholders. Finally we thank all our policyholders, agents, employees and shareholders for maintaining their faith in us,” he added.

The total premium income for FY23 soared 10.90% to ₹4,74,005 crore as compared to ₹4,27,419 crore for the previous year ended March 31, 2022.

In terms of market share measured by first year premium income (FYPI) (as per IRDAI), LIC has maintained its leadership in Indian life insurance business with a market share of 62.58% for FY23. Further (as per IRDAI), the total FYPI for LIC grew by 16.67% from ₹1.98 lakh crore in FY22 to ₹2.32 lakh crore in FY23.

The assets under management (AUM) increased to ₹43.97 lakh crore as on March 31, 2023 as compared to ₹40.85 lakh crore on March 31, 2022 registering an increase of 7.65% year-on-year.

The gross value of new business (VNB) for the year rose 16.46% to ₹11,553 crore as against ₹9,920 crore for the previous year. 

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