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Impressive Q1 FY25: LIC’s Net Profit Up 10% to ₹10,461 Crore, Total Income Reaches ₹2,10,910 Crore!

Life Insurance Corporation of India (LIC), the state-owned insurance giant, has once again demonstrated its market dominance with a strong financial performance in the first quarter of the financial year 2024-25. LIC reported a 10% increase in net profit, reaching ₹10,461 crore, alongside a substantial rise in total income, which climbed to ₹2,10,910 crore.

Breaking Down LIC’s Financial Triumph in Q1 FY25

LIC’s Q1 FY25 results reflect the company’s continued growth trajectory. The life insurance behemoth reported a net profit of ₹10,461 crore, up 10% from ₹9,544 crore in the same quarter last year. This increase is a clear indicator of the company’s robust financial health and its ability to navigate a competitive market landscape.

Total Income Surge: LIC’s Revenue Streams Flourish

LIC’s total income surged to ₹2,10,910 crore in the June 2024 quarter, up from ₹1,88,749 crore in the corresponding period of the previous year. This significant growth in total income is driven by multiple revenue streams, including first-year premiums, renewal premiums, and income from investments.

During the quarter under review, LIC’s first-year premium income rose to ₹7,470 crore, compared to ₹6,811 crore in the year-ago period. Additionally, the insurer earned ₹56,429 crore from renewal premiums, up from ₹53,638 crore a year earlier. Net income from investments also saw a notable increase, rising to ₹96,183 crore from ₹90,309 crore in the same period last year.

Solvency and Market Share: LIC’s Strengthening Position

LIC’s solvency margin, a key indicator of an insurance company’s financial stability, increased to 1.99% in the June 2024 quarter, up from 1.89% in the same quarter the previous year. This improvement highlights LIC’s strong financial foundation and its ability to meet its obligations to policyholders.

In terms of market share, LIC continued to assert its dominance, with CEO and MD Siddhartha Mohanty noting that the company’s market share increased to 64.02% in Q1 FY25, compared to 61.42% in the same quarter last year and 58.87% for the full year ended March 31, 2024.

Strategic Focus: Expanding Non-Par Product Share

LIC’s strategic focus on expanding its non-participating (non-par) product offerings is yielding positive results. The company’s share of non-par products within the individual segment, on an annualized premium equivalent (APE) basis, increased to 23.94% in Q1 FY25, compared to 10.22% in the same quarter last year. This shift reflects LIC’s ongoing efforts to diversify its product portfolio and enhance profitability.

Market Reaction: LIC Shares on the Rise

LIC’s strong financial performance has not gone unnoticed by investors. On Friday, August 9, a day after the company announced its Q1 FY25 results, LIC shares were trading over 2% higher at ₹1,153.35 on the BSE. Over the past 12 months, LIC’s stock has increased by over 79%, significantly outperforming the benchmark NIFTY50, which rose by over 24% during the same period.

Conclusion

LIC’s Q1 FY25 results underscore the company’s strong financial performance and strategic initiatives. With a solid increase in net profit and total income, coupled with a growing market share and expanding non-par product offerings, LIC is well-positioned to continue its leadership in the life insurance sector. The company’s focus on financial stability, as evidenced by its improved solvency margin, and its strategic moves to enhance profitability, make it a formidable player in the industry.

FAQs:

1. What was LIC’s net profit in Q1 FY25?

   A. LIC reported a net profit of ₹10,461 crore, marking a 10% increase from the same quarter last year.

2. How much did LIC’s total income grow in the June 2024 quarter?

   A. LIC’s total income surged to ₹2,10,910 crore, up from ₹1,88,749 crore in the year-ago period.

3. What contributed to LIC’s increase in total income?

   A. The increase was driven by growth in first-year premiums, renewal premiums, and net income from investments.

4. How did LIC’s solvency margin change in Q1 FY25?

   A. LIC’s solvency margin increased to 1.99%, compared to 1.89% in the same quarter last year.

5. What is LIC’s current market share?

   A. LIC’s market share increased to 64.02% in Q1 FY25, up from 61.42% in the same quarter last year.

6. How did LIC’s stock perform after the Q1 FY25 results?

   A. LIC shares were trading over 2% higher at ₹1,153.35 on the BSE following the results announcement.

7. What is the significance of LIC’s non-par product share increase?

   A. The increase to 23.94% in the first quarter of FY25 reflects LIC’s strategic focus on expanding its non-par product offerings.

8. How has LIC’s stock performed over the past year?

   A. LIC’s stock has increased by over 79% in the past 12 months, significantly outperforming the NIFTY50.

9. Who is the CEO & MD of LIC?

   A. Siddhartha Mohanty is the CEO & MD of Life Insurance Corporation of India.

10. What are LIC’s future growth strategies?

    A. LIC is focusing on gaining market share, diversifying its product mix, and improving margins to drive future growth.

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