Shares of Life Insurance Corporation (LIC) surged nearly 6 per cent on the National Stock Exchange (NSE) in early trade on Friday after the state insurer reported a 14-fold growth in its net profit for the June quarter. On the NSE, nearly 35.68 lakh shares changed hands at around 11:50 AM.
LIC reported that its standalone net profit for the quarter ended June 2023 surged multifold to Rs 9,544 crore as against Rs 683 crore in the same quarter last year.
However, the net premium income stood flat at Rs 98,363 crore in the quarter as against Rs 98,351 crore in the year-ago period.
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LIC’s income from investments jumped 30 per cent to Rs 90,309 crore compared with Rs 69,571 crore in the corresponding quarter of the previous financial year.
The company said a total of 32,16,301 policies were sold in the individual segment during the quarter as against 36,81,764 policies sold in the year ago period.
In addition, Prime Minister Narendra Modi, in his response to the ‘No Confidence Motion’ in Lok Sabha on Thursday, said that investors should invest in the PSU stocks such as LIC and Hindustan Aeronautics Limited.
At 12:40 PM, the stock was trading 3.09 per cent higher at Rs 661.55 per share on the NSE. It touched an intraday high of Rs 679. LIC listed on the stock exchanges in May 2022 and is down around 20 per cent since listing.
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LIC has been pushing its non-participating products over the past few years as they have higher margins. Non-participating accounted for 10.22 per cent of the APE in the June quarter, compared to 7.75 per cent in the year-ago quarter.
The rise in non-par products also led to a change in accounting policy in September 2022 due to which LIC has been reporting multi-fold growth in profits over the last two quarters.
"The Corporation had changed its accounting policy in September 2022 regarding transfer of amount (net of tax) pertaining to the accretion on the available solvency margin from non-participating policyholder’s account to shareholder’s account," said the company.
LIC transferred a total amount of Rs 27,260 crore during the fiscal 2023, due to which the profit for the June 2023 quarter is not comparable with the corresponding figures for the quarter ended June 2022.
