LIC shares shine in listless market after Q3 results — what should investors do?

Life Insurance Corporation (LIC) shares held on firmly to the green on Friday, a day after the state-run life insurance behemoth reported its financial results for the quarter ended December 2022. LIC shares gained by Rs 26.6 or 4.3 per cent to Rs 639.9 apiece at the strongest level of the day on BSE, before finishing the session with a gain of 1.1 per cent at Rs 620.1 apiece.

After market hours on Thursday, LIC reported a net profit of Rs 8,334.2 crore for the three-month period, as against a net profit of Rs 234.9 crore for the corresponding period a year ago. Its net premium income came in at Rs 1,11,787.6 crore, up 14.5 per cent on a year-on-year basis, according to a regulatory filing.

The life insurer's assets under management grew 10.5 per cent to Rs 44.3 lakh crore for the December quarter compared with the year-ago period. 

LIC's solvency ratio — a key measure of financial health that determines a business's a ability to meet its long-term debt obligations — came in at 1.85 for the quarter ended December as against 1.77 for the year-ago period. (Read more on LIC Q3 results)

According to Emkay, the company's performance in the nine months to December 2022 was along expected lines. 

LIC reported a net profit of Rs 22,989.6 crore for the April-December period, as against a net profit of Rs 1,871.6 crore for the year-ago period. 

The brokerage maintained a 'hold' rating on LIC and reduced its target price by 17 per cent to Rs 700.

"LIC is trading on an undemanding valuation of FY24E P/EV of 0.63x. However, given the lack of positive catalysts, we continue to maintain our neutral view on the stock," Emkay said.

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