Target: ₹1,467
CMP: ₹1,039.05
LIC’s focus on its Non-Par products is expected to drive the revenue and profitability growth in future. During the 9-month period ending December 2023, the share of non-par products increased to 14 per cent from 9.4 per cent a year ago. During the same period, the share of par products dropped to 85.96 per cent from 90.5 per cent. It is well on track as per the management’s guidance of 15 per cent share in Non-Par products stated at the time of listing in May 2022.
LIC’s focus on changing product mix and launching new non- par products has shown positive results, with a significant increase in non- par share within the individual business.
Life Insurance Corporation of India still retains the prime choice amongst the general population in new policy generation. With a range of new Non-Par policies in its pipeline, it seems confident of increasing its market share in the times to come. Annual Premium Equivalents (APE) is expected to improve from here on, propelled by product launches across categories.
Enhanced focus on digital initiatives is likely to drive customer acquisition and customer servicing too. Valuations too seem attractive compared to its other listed peers. We would recommend a Buy with a target price of ₹1,467 in the next 9-12 months.