Buy Life Insurance Corporation; target of Rs 1200: Motilal Oswal

Motilal Oswal is bullish on Life Insurance Corporation has recommended buy rating on the stock with a target price of Rs 1200 in its research report dated November 10, 2024.

Broker Research

November 12, 2024 / 15:22 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Life Insurance Corporation

In 2QFY25, LIC reported net premium income of INR1.2t, up 12% YoY. For 1HFY25, net premium income grew 14% YoY to INR2.3t. We expect net premiums to grow 8% YoY during 2HFY25. New business APE grew 26% YoY to INR164.7b, driven by 31% YoY growth in Individual APE to INR114.2b and 15% YoY growth in Group APE to INR50.5b. For 1HFY25, new business APE grew 24% YoY to INR280.2b. We expect new business APE to grow 5% YoY in 2HFY25. VNB margins (net) improved by 260bp YoY to 17.9%, driven by 47% YoY growth in absolute VNB to INR29.4b. For 1HFY25, VNB grew 38% YoY to INR45.5b, reflecting VNB margin of 16.2% (14.6% in 1HFY24). We expect VNB to grow 12% YoY in 2HFY25.

Outlook

We have reduced our EV multiple factoring in higher sensitivity to equity market movements, weaker than expected performance in Oct’24 and impact of surrender charges. Reiterate BUY with a TP of INR1,200 (premised on 0.7x Sep’26E EV).

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