Equity Research Report - Life Insurance Corporation of India Limited
LIC is the 3rd strongest global insurance brand, with ~28.07 crore policies being serviced and ~13.33 lakh agents.
Company Overview:
- Life Insurance Corporation of India offers life insurance products in India, Fiji, Mauritius, and the UK.
- It provides individual projects, which includes collaborating coverage products; and non-participating products comprising savings coverage, term coverage, health insurance, annuity and pension, and unit-linked insurance merchandise; special merchandise for women and children, micro coverage merchandise; and riders, an add-on covers to the base policy to facilitate additional advantages linked to the accident, vital infection, and demise and premium waiver advantage.
- The organization additionally provides group products, including group term coverage, group savings coverage, group savings pension, and group annuity products.
- Life Insurance Corporation of India was established in 1956 and is primarily based in Mumbai, India.
Key Statistics:
Market Cap: Rs. 406602 Cr.
Current Price: Rs. 642.9/-
52W High: Rs. 919/-
Stock P/E: 135.0
Book Value: Rs. 50.7/-
Dividend Yield: 0.23%
P/B: 12.7
Face Value: Rs.10/-
52W Low: Rs. 641.9/-
Source: www.stocx.in
Shareholding Pattern (%):
Source: www.stocx.in
Break up of Business: % Share to Total NB Premium:
Source: Company's Corporate Presentation
Peer Comparison:
Source: www.stocx.in
Growth Drivers:
- LIC has the highest gap in market share2 relative to the 2nd largest life insurer in the Indian market, as compared to market leaders in the top 7 markets globally.
- 10th Largest life insurer globally by total assets.
- Fifth largest life insurer globally by GWP and the largest player in the fast growing & underpenetrated Indian life insurance sector.
- Trusted brand and a customer centric business model.
- Cross-cyclical product mix that caters to diverse consumer needs and an individual product portfolio that is dominated by participating life insurance policies.
- Presence across India through an omni-channel distribution network with an unparalleled agency force.
- Harnessing technology capabilities to support customer connect and drive operating efficiencies.
- Largest asset manager in India1with an established track record of financial performance & profitable growth.
- Robust risk management framework, and recognized as a Domestic Systemically Important Insurer (D-SII).
- Spearheaded by a highly experienced and qualified management team, a distinguished Board & strong corporate governance framework.
- 96.03 % of Total employees are deployed at Divisional and Branch Office to look after operational activities.
- Training is imparted to agents by senior officers to ensure quality of training.
- Producing highest number of MDRTs through recruitment of millennial generation & massive training.
Source: Company's Corporate Presentation
Financial Snapshot :
Balance Sheet (Rs. in Crores):
Profit and Loss Account (Rs. in Crores):
Cash Flow Statement (Rs. in Crores):
Ratio Analysis:
Source: www.stocx.in
VALUATIONS:
On the basis of Discount Cash Flow Valuation Method, we
are recommending ‘Buy’ for the stock. Since the stock
offers good opportunity, we initiate a ‘BUY’ signal on the
stock with 12-month price target of Rs 728/- share an
upside of 13.22 % from current levels.
