Shares of Life Insurance Corporation of India (LIC) jumped over 2% on Tuesday after JPMorgan upgraded its rating from ‘Underweight’ to ‘Overweight’ and raised the target price to ₹1,075 from ₹790. This upgrade implies a potential 17% upside from the current market price of ₹920. As of 9:46 AM, LIC shares were trading at ₹937.85, up 2.11% on the NSE.
Key Highlights from JPMorgan’s Analysis:
- Valuable New Business (VNB) Growth: The rating upgrade is largely driven by strong VNB growth, supported by LIC’s enhanced product mix, which is expected to sustain long-term growth.
- Revised Forecasts: JPMorgan increased its VNB forecasts for FY25 and FY26 by 9% and 11%, respectively.
- Positive Outlook: The combination of LIC’s improved product benefits and lower bond yields continues to favorably impact the company’s growth outlook.
Q2 FY25 Financial Performance:
- Net Profit: LIC reported a standalone net profit of ₹7,621 crore for the September quarter, a slight 4% decline from ₹7,925 crore in the same quarter last year.
- Net Premium Income: Increased by 11% year-on-year to ₹1.19 lakh crore, compared to ₹1.07 lakh crore in the corresponding quarter.
- Investment Income: Grew 16% YoY, reaching ₹1.08 lakh crore in Q2, up from ₹93,942 crore last year.
- First-Year Premium Income: Registered a 12% YoY growth, totaling ₹11,201 crore, up from ₹9,988 crore in the same period last year.
LIC’s solid Q2 performance and the positive outlook by brokers like JPMorgan have bolstered investor sentiment, contributing to the stock’s upward momentum.
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