Analysts See Upside Despite Concerns Over Margins, Growth

Analysts see a potential upside for shares of Life Insurance Corp. after its first-quarter premium and revenue rose even as margin narrowed.

The insurance behemoth has all the levers in place to maintain its industry-leading position and ramp up growth in highly profitable product segments, Motilal Oswal said in its note.

Emkay Global, however, expressed concerns on its ability to offer competitive products or gain market share in the mass-affluent and high-net-worth buyer segments.

The state-owned life insurer’s net profit jumped 231 times year-on-year but declined 71% sequentially in the quarter ended June. That could be attributed to a change in its distribution policy in September last year.

Its overall premiums rose 20% and revenue was up 10% year-on-year.

Value of new business—present value of the future profits associated with new business written during the period—stood at Rs 1,861 crore. VNB margin was at 13.6%. It’s lower than what the insurer reported for entire FY22.

The earnings were announced after market hours on Friday and Monday was a holiday.

Shares of LIC gained as much as 1.15% in the pre-open on Tuesday compared with a 0.18% rise in the BSE S&P Sensex.

Here’s what brokerages have to say about LIC’s Q1 FY23 performance: