LIC's Comeback Rally Continues As Q3 Results Beat All Estimates, Declares Dividend

Life Insurance Corporation’s (LIC) share price was shooting up on Friday after the state-owned firm posted a bumper profit for the third quarter.

What Happened: LIC reported a significant 49% year-on-year increase in net profit, reaching ₹9,441 crore for the third quarter ended December 31, compared with ₹6,334 crore in the same period last year, beating street estimates on all fronts.

This substantial growth was accompanied by a 7% rise in total annualized premium equivalent (APE) to ₹13,163 crore and a noteworthy 46% surge in the Value of New Business (VNB) to ₹2,634 crore.

LIC also announced an interim dividend of ₹4 per equity share for the financial year 2023-24.

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The declaration, amounting to a total dividend outgo of ₹2,529 crore, will be paid to eligible shareholders. The Record Date for determining the dividend entitlement is set for February 21, with the payout scheduled within 30 days from the date of declaration.

With the government holding a 96.5% stake in LIC, it stands to receive ₹2,440 crore, leaving ₹89 crore for other shareholders.

Detail Breakdowns: The breakdown of APE showed that 65.67% was attributed to individual business, while 34.33% was from group business. The non-par APE notably increased by 49.08% year-on-year, contributing to an improved VNB margin of 16.6% compared to 14.6% in the previous year.

Additionally, LIC’s assets under management (aum) witnessed an 11.98% increase year-on-year, reaching ₹49.66 lakh crore by December 31, 2023. The overall expense ratio remained stable at 15.28%, while the yield on investments on policyholders’ funds rose to 9.14%.

Moreover, the company saw a reduction in net non-performing assets (NPA) in the policyholder’s fund, which decreased to ₹8.01 crore by December 31, compared with ₹10.94 crore in the previous year.

Price Action: LIC’s share price was up 4.14% at ₹1,151 near the start of trade on Friday.

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