Life Insurance Corporation of India (LIC) shares were in demand on Friday, with the stock rising as much as 2.43% to an intraday high of Rs 397 per share after the insurer reported a strong set of June quarter earnings.
At 9:40 am, LIC shares were trading 1.32% higher at Rs 392.65 apiece. In comparison, the BSE Sensex was down 0.35% at 78,680.
The rally came after LIC reported a robust June quarter, with net profit rising 23% year-on-year, supported by healthy premium growth, a sharp improvement in new business profitability and higher investment income.
The country's largest life insurer posted a net profit of Rs 13,492 crore for the first quarter, compared with Rs 10,987 crore in the corresponding period last year.
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Net premium income increased 7% year-on-year to Rs 1.27 lakh crore, while other income surged to Rs 635 crore from Rs 130 crore a year ago.
A key highlight of the quarter was the major improvement in the insurer's Value of New Business (VNB), which jumped 61% year-on-year to Rs 3,136 crore.
The VNB margin expanded 750 basis points to 22.9% from 15.4% in the year-ago period, reflecting an improved product mix and stronger profitability from new business written during the quarter.
LIC also reported robust growth in first-year premium income, which rose 22% year-on-year to Rs 9,217 crore, indicating healthy traction in new policy sales.
The insurer further strengthened its balance sheet during the quarter, with the solvency ratio improving to 2.42 from 2.17 a year ago, remaining comfortably above the regulatory requirement.
On the persistency front, the 13th-month persistency ratio edged lower by 50 basis points to 70.4% from 70.9%, indicating a marginal decline in short-term policy renewals.
However, the 61st-month persistency ratio improved considerably by 300 basis points to 61.3% from 58.3%, highlighting stronger long-term policy retention.
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