LIC growth woes curb valuations

Unimpressive show

- Manish Joshi

Life Insurance Corp. of India Ltd (LIC) stock jumped over 8% on Wednesday to ₹1942 despite its dull March quarter (Q4FY25) results. Perhaps, the Street's focus shifted to the cheap valuation of the stock that trades at a price-to-earnings multiple of 12x, as per Bloomberg consensus FY26 estimates.

LIC's Q4 performance was far from inspiring. Total annualized premium equivalent (APE) and value of new business (VNB) dropped 11% and 3% year-on-year to ₹18,853 crore and ₹3,534 crore, respectively. The only comforting factor was the 154 basis points (bps) increase in the VNB margin to 18.7%.

LIC had been a step ahead of its peers in terms of transparency, voluntarily disclosing VNB margins for each segment. However, it has changed its data presentation for Q4 and FY25 by showing aggregate VNB data and not for participating, non-participating and group insurance separately. It justified the change as an alignment with industry practice.