I-Sec maintains Buy on LIC, target price Rs 1,040

ICICI Securities has maintained Buy call on Life Insurance Corporation of India (LIC) with an unchanged target price of Rs 1,040. The current market price of Life Insurance Corporation is Rs 953.55. Life Insurance Corporation of India, incorporated in 1956, is a Small Cap company with a market cap of Rs 603689.41 crore, operating in Financial Services sector.

LIC’s key products/revenue segments include Premiums Earned and Other Operating Revenue for the year ending 31-Mar-2024.

Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 244088.33 crore, up 19.34 % from last quarter Total Income of Rs 204525.35 crore and down -3.51 % from last year same quarter Total Income of Rs 252965.31 crore. The company has reported net profit after tax of Rs 17616.30 crore in the latest quarter. The company?s top management includes Mr.Siddhartha Mohanty, Mr.Muthu Raju Paravasa Raju Vijay Kumar, Dr.V S Parthasarthy, Mr.Raj Kamal, Mr.Gurumoorthy Mahalingam, Mrs.Anjuly Chib Duggal, Dr.Ranjan Sharma, Prof.Anil Kumar, Mr.Vinod Kumar Verma, Mr.Doraiswamy Ramchandran, Mr.Sat Pal Bhanoo, Mr.M Jagannath, Mr.Tablesh Pandey, Dr.Maruthi Prasad Tangirala. Company has Ramamoorthy (N) & Co as its auditors. As on 31-03-2025, the company has a total of 632 crore shares outstanding.

Investment Rationale
ICICI Securities’ valuations are based on 0.7x (unchanged) FY27E EV of Rs 9.3 trillion. The multiple adequately reflects the risk of EV sensitivity to market movement and a lower core RoEV profile (compared to peers) on a high base. The brokerage estimates 5%/8% change in APE, VNB margin of 18%/18.5% (16.8%/17.6% in FY24/FY25) and unwinding of ~9% (FY24/FY25: 9%/9.6%) for FY26E/27E. They expect core RoEV at ~10.4% for FY26E/27E (vs. 11.5%/11.4% in FY24/FY25). Further improvement in VNB margin and tailwinds in investment returns could lead to a positive surprise ahead. Basis FY25 sensitivity, LIC?s embedded value declines by 6.7% (vs. 7.2% in FY24) with a 10% drop in equity levels and by 1% (vs. 0.4%, as on Mar?24) with a 100bps increase in reference rates.