Hold LIC of Rs 700: Emkay Global Financial

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26 Aug, 2025 12:21

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Emkay Global Financial's research report on LIC

LIC’s 9MFY23 results came broadly in line with our estimates with APE of Rs375.5bn (our est: Rs389bn), VNB of Rs54.8bn (est: Rs56.4bn), and VNB margin of 14.6% (est: 14.5%). Overall APE growth moderated materially to 25.5% YoY in 9MFY23 vs. 36.7% for HY23. For Q3FY23, APE growth was muted at 7.4%YoY, driven by 32% YoY growth in group business, and was dragged down by 0% YoY growth in the individual business. PAT for 9MFY23 stood at Rs230bn (Q3FY23: Rs63.3bn), owing to a host of factors such as accounting policy-led changes of transferring surplus in the non-par account to shareholders’ account. On net basis, LIC’s 9MFY23 numbers do not change our opinion on the fundamental challenges of slower growth and sticky cost leading to gradual market share loss in the retail segment and subpar profitability reflecting in poor embedded value (shareholder value) compounding. To reflect 9M developments, we have slightly adjusted our numbers. Currently, LIC is trading on an undemanding valuation of FY24E P/EV of 0.63x.

Outlook

However, given the lack of positive catalysts, we continue to maintain our neutral view on the stock. We reiterate our Hold rating on the stock with our revised Dec-23E TP of Rs700 (0.75x Dec-23E P/EV).

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LIC - 14 -02 - 2023 - emkay