LIC shares rally up to 5% after mixed Q1 results, dividend announcement

Life Insurance Corporation of India shares rallied up to 5 per cent on Friday after the public sector insurance giant posted a mixed set of financial numbers for the first quarter of FY 2023-24 (Q1FY24).

The insurance behemoth reported a marginal growth in net premium income to Rs 98,363 crore in the April-June quarter of FY24 as against Rs 98,352 crore in the year ago quarter.

The company’s profit after tax (PAT) soared 13-times to Rs 9,544 crore in the April-June quarter compared to Rs 683 crore in the corresponding period a year ago.

The profit growth was aided by transfers from Non-Par funds to shareholders accounts. LIC stated that it achieved an increase in its Non-Par product mix as a percentage of the overall individual business in the first quarter.

Decline in annual premium equivalent (APE)

The public sector insurer reported a decline in annual premium equivalent (APE) by 7.1 per cent year-on-year to Rs 9,532 crore in the first quarter of FY24 from Rs 10,270 crore in the June quarter in FY23.

Value of new business (VNB) also declined by 6.8 per cent to Rs 1,302 crore in Q1FY24 as against Rs 1,397 crore in the year ago quarter. The VNB value often measures the profitability of an insurance company.

VNB margins were also flat at 13.7 per cent in the June quarter compared to 13.6 per cent in the same quarter of the previous year.

The solvency ratio was at 1.89 per cent in Q1 of FY24 against 1.88 per cent in Q1FY23.

The asset under management of LIC rose by 12.4 per cent on year to Rs 46.11 lakh crore in the June quarter from Rs 41.02 lakh crore in the year ago period.

LIC dividend

LIC said that its board also has proposed a dividend of Rs 3 per equity share of face value Rs 10 each for the financial year 2022-23.

Shares of LIC were trading at Rs 661.60 apiece, up 3.03 per cent, on BSE at 10:49 AM.