Life Insurance Corporation (LIC) – Q3 FY2025 Results
Ticker: NSE: LICI | BSE: 543526 | Date: February 7, 2025
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Investment Summary
Life Insurance Corporation of India (LIC) remains India’s largest life insurer, with a 57.42% market share in total premiums and 64.53% market share in policies. Despite increasing competition from private players, LIC continues to dominate the industry due to its massive distribution network, trusted brand, and large asset base of ₹54.77 lakh crore.
Q3 FY2025 Results Key Highlights
- Premium growth of +5.51% YoY (₹3,40,563 Cr vs ₹3,22,776 Cr in Q3 FY24)
- Profit After Tax (PAT) up +8.27% YoY (₹29,138 Cr vs ₹26,913 Cr in Q3 FY24)
- Embedded Value (IEV) surged by +24% YoY to ₹8,21,716 Cr, indicating strong intrinsic value growth
- Solvency ratio improved to 2.02, reflecting a solid capital position
Key Financial Metrics
| Metric | Q3 FY25 | Q3 FY24 | YoY Change |
|---|---|---|---|
| Total Premium Income | ₹3,40,563 Cr | ₹3,22,776 Cr | +5.51% |
| Individual New Business Premium | ₹1,78,975 Cr | ₹1,71,040 Cr | +4.64% |
| Total Group Business Premium | ₹1,19,147 Cr | ₹1,13,057 Cr | +5.39% |
| Profit After Tax (PAT) | ₹29,138 Cr | ₹26,913 Cr | +8.27% |
| Assets Under Management (AUM) | ₹54,77,651 Cr | ₹49,66,371 Cr | +10.29% |
Strategic Growth Plans
1. Expansion of Product Portfolio
LIC now offers 38 insurance products, including:
- 24 Individual Products
- 8 Group Products
- 5 Individual Riders & 1 Group Rider
Increased Focus on Non-Par Products:
- Non-par products now contribute 27.68% of APE, up from 14.04% in Q3 FY24
- ULIP segment growth: +210.79% YoY (₹732 Cr to ₹2,275 Cr)
Strategic Rationale: LIC’s shift towards higher-margin non-participating products is expected to improve profitability and long-term value creation.
2. Distribution & Digital Transformation
- Largest agency force in India with 14.19 lakh agents
- Bancassurance & Alternate Channels New Business Premium grew +31.06% YoY to ₹2,003.95 Cr
Tech Initiatives:
- AI Chatbots for policy queries
- WhatsApp-based policy servicing & digital KYC integration
- Ananda App: 8.3% of policies now sold digitally
Strategic Rationale: Strengthening digital sales will counter competition from private insurers like HDFC Life & ICICI Prudential.
Competitive Landscape & Risks
Key Competitors
HDFC Life, ICICI Prudential, SBI Life, Max Life, Bajaj Allianz
Risks & Challenges
- Regulatory Risks: IRDAI changes may impact LIC’s product mix & capital allocation
- Market Share Erosion: Private players are aggressively expanding
- Investment Risk: Large exposure to equity markets increases volatility risk
- Operational Risks: Persistency ratios must further improve for long-term profitability
Valuation & Investment Thesis
Valuation Metrics
- Market Cap: ₹5,16,152 Cr
- Current Price: ₹816
- P/E Ratio: 12.0
- Book Value: ₹154
- Dividend Yield: 1.23%
- ROE: 63.4%
- Price-to-Book Ratio (P/BV): 5.3x
Investment Thesis
- ✅ Strong Fundamentals: High ROE (63.4%), improving persistency, and stable cash flows
- ✅ Undervalued vs. Growth Potential: With Embedded Value growth of +24% YoY, LIC remains undervalued vs. global peers
- ✅ Digital & Product Expansion: Rising non-par product sales & bancassurance will boost VNB margins
Valuation Estimate: ₹950 – ₹1,050 (15-25% upside potential)
Conclusion
LIC remains a strong long-term investment, backed by dominant market share, high AUM, and increasing profitability. However, competition & regulatory risks remain key concerns.
Disclaimer
This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.
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