Shares of Life Insurance Corporation of India gained the most in a day after its second-quarter profit jumped tenfold.
Standalone after-tax profit jumped 10 times year-on-year to Rs 15,952 crore in the quarter ended September from Rs 1,434 crore, according to an exchange filing.
LIC Q2 FY23 Highlights (Standalone, YoY)
Revenue rose by 19% to Rs 2.2 lakh crore.
The management expense ratio was 18.25%, as against 14.92%.
The 13th and 61st month persistency ratios—or customer retention—improved to 70.52% from 68.81% and to 55.83% from 53.88%, respectively.
The solvency ratio, which measures the extent to which assets cover commitments for future liabilities, rose to 188% from 183%. It’s above the minimum requirement of 150%
The net premium of the company increased by 27% year-on-year to Rs 1.3 lakh crore.
The rise in standalone profit stems from the change in its distribution policy in September last year ahead of its initial public offering.
Shares of the company, which went public earlier this year, gained 9.1%, its single largest intraday gain, to Rs 684.9 apiece during opening trade while the benchmark Nifty 50 gained 0.12% on the NSE.
Despite this, the stock continues to trade 30% lower to its IPO price of Rs 949. Trading volume is high at 26.8 times the 30-day average so far on Monday. Its relative strength index is at 71, which may indicate to the stock being overbought.
Of the 12 analysts tracking the company, 10 maintain a ‘buy’, two suggest a ‘hold’ and none recommend a ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies an upside of 25.8%.