Share of Life Insurance Corporation of India Limited (LIC Limited) is currently trading at around Rs.737/- Existing as well as prospective Investors of the Company are asking the LIC Share Price Target for medium and long term. People are coming to Share Market Experts and Investment Consultants and are asking for the LIC Share Price Target for 2025,2030,2035 & 2040. In this article, we will discuss and analyse the present business and financial fundamentals of the company and also talk about the future business prospects of the company so that a fair target of the share price for 2025, 2030,2035 and 2040 can be fixed.
Discussion & Analysis of present Business & Financial performance with future business prospects of Life Insurance Corporation of India Limited:
Life Insurance Corporation of India (LIC), established in 1956, stands as the country’s largest life insurer and a significant institutional investor. As of March 2024, LIC managed assets totaling ₹28.3 trillion, catering to approximately 290 million policyholders.
Recent Business Performance
In the third quarter ending December 31, 2024, LIC reported a profit after tax of ₹110.56 billion, marking a 17% increase from the ₹94.44 billion recorded in the same period the previous year. This growth was largely attributed to a 30% reduction in employee-related expenses, which stood at ₹66.91 billion. However, net premium income experienced a 9% decline to ₹1.07 trillion, influenced by a 24% drop in single premiums and a 14% decrease in first-year premium collections. These declines were partly due to new regulations that reduced charges for policyholders terminating policies prematurely. Despite these challenges, LIC’s solvency ratio improved to 2.02 from 1.93, indicating a strengthened capacity to meet long-term obligations.
In the second quarter ending September 30, 2024, LIC’s profit after tax decreased by 3.8% to ₹76.21 billion, down from ₹79.25 billion in the corresponding quarter of the previous year. This decline was primarily due to a 17% increase in net benefits paid to policyholders, totaling ₹975.62 billion. Nevertheless, net premium income rose by 11.6% to ₹1.20 trillion during this period. The value of new business (VNB), reflecting expected profit from new premiums, surged by 37.7% year-over-year for the April-September period, with the VNB margin improving to 16.2% from 14.6%. This enhancement underscores LIC’s strategic focus on high-margin non-participating policies.
Future Business Prospects
Looking ahead, LIC anticipates a 2% to 3% increase in its new-business margin for the fiscal year 2025. The corporation is actively seeking to acquire a majority stake in a standalone health insurance company, aiming to diversify its product offerings and strengthen its position in the health insurance sector. Additionally, LIC plans to commence trading in forward rate agreements (FRAs), a move expected to bolster India’s interest rate derivatives market. This strategic initiative is likely to enhance LIC’s investment portfolio and risk management capabilities.
Furthermore, LIC’s entry into the interest rate derivatives market is anticipated to invigorate this sector, potentially leading to lower yields and borrowing costs. The corporation’s involvement in FRAs has already contributed to a nearly 20% increase in trading volumes from June to early August 2024, reflecting its influence in the financial markets.
In summary, despite facing challenges such as regulatory changes and increased benefit payouts, LIC has demonstrated resilience through cost management and strategic initiatives. Its plans to expand into health insurance and engage in interest rate derivatives trading indicate a proactive approach to diversification and growth, positioning the corporation favorably for future business prospects.
SHARE PRICE TARGETS:
LIC Share Price Target 2025
Based on the above discussion and analysis, the share price of LIC Ltd may touch the level of around Rs.810-850 in 2025.
LIC Share Price Target 2030
Based on the above discussion and analysis, the share price of LIC Ltd may touch the level of around Rs.1400-1500 in 2030.
LIC Share Price Target 2035
Based on the above discussion and analysis, the share price of LIC Ltd may touch the level of around Rs.2400-2500 in 2035.
LIC Share Price Target 2040
Based on the above discussion and analysis, the share price of LIC Ltd may touch the level of around Rs.4000-4500 in 2040.
Disclaimer: Investments in Capital Market/Share Prices are subject to market fluctuations and are dependent on several factors. These predictions are based on the current market conditions and the future market expectations. Investors are advised to take into consideration all these factors before making any investment in Capital Market. This article should not be treated as Investment advisory and is for general Guidance & Educational purpose only. We keep revising our share price targets based on the latest information available with us. Please keep visiting our website regularly to keep yourself updated. MoneyInsight does not offer investment advice and does not encourage any action based on its content.
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