The largest insurer, Life Insurance Corporation of India (LIC) which does not belong to the Maharatna or Navratna or Miniratna category, is the second largest PSU stock in India in terms of market share. Also, LIC is a debt-free company, making it even more attractive. Brokerage Religare Broking has added LIC stock to its top picks for 2025. Some of the key reason to BUY LIC in the New Year is its dominance in the industry, strong product portfolio, rise in non-par products and well-poised evolving landscape. The new target price on LIC is up to Rs 1,160.
LIC Share Price:
On January 1st, LIC share price stood at Rs 896.40 apiece, up by 0.52% on BSE with a market cap of Rs 5,66,972.79 crore, making it the second largest PSU after SBI.
The stock has corrected significantly from its 52-week high of Rs 1,221.50 apiece, while it is currently trading near its 52-week low of Rs 815.05 apiece. In a year, the stock has gained by over 4.4%. While after its listing in May 2022, the stock has only gained by at least 8.5% so far.
Hence, the potential of LIC stock is yet to be tapped thoroughly. Here are the key factors highlighted by Religare Broking to invest in LIC share price.
Largest domestic insurer:
It is the largest insurance provider company in India. It has a market share of above 58.87% (as on Q2FY25) in new business premium. 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.
Strong product portfolio driving premium growth:
During the Q2FY25, company reported an 11.5% YoY growth in net premium income, reaching ₹1.20 lakh crore, primarily driven by a 23.8% YoY rise in single premium to ₹46,998 crore. The company effectively managed commission costs, which increased by 7.8% YoY to ₹6,163 crore. Strong product portfolio and one of the largest agency forces helps company to derive premium growth.
Increasing share on non-par products:
It has significantly boosted its share in non-participating (non-par) products, enhancing its VONB margins. Over the past year, the contribution of non-par products in individual APE rose from ₹967 crore to ₹3,164 crore, increasing their share from 11.1% to 27.7%. This focus on high-margin non-par products is expected to further improve its margins.
Well positioned in evolving landscape:
LIC of India, a leading life insurer showing strong growth from steady premium income and improved margins from high-margin non-participating products and non-par products. With a strategic focus on expanding its product mix and enhancing profitability, LIC is well-positioned for continued success in the evolving insurance landscape.
Hence, the brokerage recommended BUY in the range of Rs 840 to Rs 900 for target price of Rs 1,045-1,160 in 2025.
In 2024, LIC paid interim and final dividend of Rs 4 and Rs 6 per share for FY24, and the ex-dates were in February and July.
Life insurance corporation, popularly known as LIC, is Indian state-owned insurance group and investment company. It is the country's largest institutional investor with total assets under management worth Rs 52.52 trillion (US$610 billion) as of March 2024.
Click it and Unblock the Notifications
Sign in with Google