State-owned Life Insurance Corporation (LIC) Ltd. shares saw an uptick in the morning deals on February 10, after the insurance major saw a fall in net premium income for the quarter ended December 31, 2024.
LIC reported a 9 percent decline in its net premium income which moderated to Rs 1,06,891 crore in the third quarter of the current fiscal from Rs 1,17,017 crore in the same period a year ago.
Net Premium Income for life insurance companies is the total premium collected from policyholders after deducting reinsurance costs. It represents the actual revenue that an insurer earns from underwriting policies.
The firm posted a 17 percent rise in its standalone net profit to Rs 11,056 crore in the third quarter ended December 2024. It had reported a net profit of Rs 9,444 crore in the year-ago period.
LIC saw a 16 percent year-on-year rise in net profit to Rs 11,009 crore, even as net premium income declined 9 percent to Rs 1.07 lakh crore. Meanwhile, its gross NPA margin improved to 1.64 percent.
At 9.23 am, LIC shares were trading at Rs 822.85, higher by 0.8 percent compared to the previous session's closing price.
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During Q3FY25, LIC delivered a healthy margin profile despite implementation of the new surrender regulations and with VNB (value of new business) margin at 19.4 percent led by increased Non-Par mix. However, APE (annual premium equivalent) growth continues to struggle, with APE declining 24 percent for Q3FY25, noted Emkay Global.
Domestic brokerage Emkay Global trimmed its target price on the insurance major to Rs 1,100 per share, down from Rs 1,150, while maintaining its buy rating.
Goldman Sachs has maintained a neutral rating on LIC with a target price of Rs 900 per share. The company's topline performance fell short of expectations, primarily due to a 38 percent year-on-year decline in its individual participating business, along with weakness in the group segment. Margins contracted as the benefit from better product mix was offset by lower risk-free rates.
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