LIC shares hit record high after state-run life insurance giant stages strong Q3 show

LIC share price:  Life Insurance Corporation of India (LIC) shares scaled an all-time high on Friday a day after the state-run life insurance major reported a strong set of quarterly results. The LIC stock gained by as much as Rs 68.8, or 6.2 per cent, to a record Rs 1,175 apiece on BSE, surpassing an earlier peak of Rs 1,144.5 apiece registered the previous day.

At 9:25 am, the stock was up 3.3 per cent at Rs 1,142.8 apiece on the bourse.

LIC Q3 results

After market hours on Thursday, LIC reported a standalone net profit of Rs 9,444.4 crore for the fiscal third quarter, up 49.1 per cent on a year-on-year basis.

The PSU life insurance behemoth’s net premium income grew 4.7 per cent to Rs 1,17,016.9 crore, according to a regulatory filing.

The insurer's value of new business (VNB) margin improved by 200 basis points to 16.6 per cent for the quarter under review. 

LIC's VNB margin has improved in contrast to the sector, which is witnessing a decline in the metric, according to Zee Business research. 

LIC interim dividend

The company’s board declared an interim dividend of Rs 4 per share.

What should investors do? Here's what market wizard Anil Singhvi recommends

Zee Business Managing Editor Anil Singhvi recommends a "clear cut hold" on LIC shares and suggests investors use opportunities to buy the PSU life insurance major's stock at lower levels. 

AK Prabhakar, head of research at IDBI Capital Markets told Zeebiz.com

“There are lots of changes happening in the insurance sector as a whole, with the authorities working to make it simpler and more convenient for the customer.”

“One can expect many changes in the insurance space as a whole in the next 1-2 years, both in public and private sectors.”

Those looking to pick stocks from the space can plan their investments slowly and cautiously, he added.

"Rising contribution from the non-par business is a welcome sign for the overall profitability of LIC since the VNB margin in non-par business is 63.8 per cent, up 20 bps," said Omkar Kamtekar, Research Analyst at Bonanza Portfolio.

"The strategic shift by the LIC management to sacrifice overall growth to augment profitability has started to bear fruit. It is now critical to build on this execution," Kamtekar added.

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