LIC Share Price Jumps Over 5%; Q4FY25 Net Profit Surges 38% on Cost Efficiency

The State-owned Life Insurance Corporation of India (LIC) has posted impressive financial results for the January-March quarter of 2024-25 (Q4FY25), reporting a 38% year-on-year (YoY) increase in net profit to ₹19,012 crore. This growth was primarily driven by a significant reduction in operational expenses.

LIC’s Cost Management Boosts Profitability

LIC’s expense of management (EoM) dropped sharply by over 33% compared to the same quarter last year, falling to ₹16,495 crore. The insurer also saw a 6.5% decline in net commission costs, which stood at ₹7,711 crore.

Employee remuneration and welfare expenses were cut drastically by nearly 57% to ₹5,928 crore, reflecting the company’s focus on cost control.

LIC’s Premium and New Business Performance

Despite the positive profit trends, LIC’s annualised premium equivalent (APE) fell almost 11% to ₹18,853 crore in Q4FY25 from ₹21,180 crore a year ago. The value of new business premium (VNB) declined slightly by 3% to ₹3,534 crore.

However, LIC’s VNB margin, a key profitability indicator, improved to 18.75% from 17.21% in the previous year, demonstrating enhanced efficiency in new business generation.

Robust Investment Income in FY25

Investment income continued to be a major contributor, with net income from investments rising over 10% YoY to ₹93,133 crore in the quarter. For the full year FY25, investment income grew by nearly 8% to ₹3.92 trillion. During the post-results conference call, LIC revealed it had invested ₹1.85 trillion in equities during FY25, a 41% increase over FY24, generating profits of ₹73,000 crore up 19% YoY.

The company also expanded its corporate bond investments to ₹80,000 crore, a 30% rise compared to the previous year, solidifying its position as one of India’s largest debt market investors.

LIC’s Annual Financial Highlights

For the fiscal year FY25, LIC’s net profit climbed to ₹48,151 crore from ₹40,676 crore in FY24. The insurer’s assets under management (AUM) increased by over 6% to ₹54.52 trillion, up from ₹51.23 trillion in the previous year. The yield on investments from policyholders’ funds (excluding unrealised gains) stood at 7.92% in Q4.

Improving Persistency Ratios

LIC’s persistency ratios, a measure of customer retention, were stable for the 13th month at 68.62% and slightly lower for the 61st month at 54.54%. In the previous quarter, the 13th-month persistency was 68.61%, and the 61st month was 59.69%.

LIC management highlighted ongoing efforts to improve persistency, including revamping its product portfolio following new regulations, and expects to see positive results in the coming year.

Financial Strength and Solvency

The expense-to-management ratio improved significantly to 11.15% from 16.20% in Q4 FY24, underscoring LIC’s efficiency gains. Additionally, the company’s solvency ratio a key indicator of financial health, stood at a strong 211%, up from 198% the previous year, signalling robust capital adequacy.

LIC’s Share Price Performance

Life Insurance Corporation of India (LIC) emerged as one of the top gainers in the equity market. The stock opened at ₹892 and climbed to an intraday high of ₹922, marking a significant increase of ₹50.05 or 5.74% from the previous close of ₹871.25. The latest quoted value stands at ₹921.30, supported by a Volume Weighted Average Price (VWAP) of ₹907.13.

Read More: LIC Ups Stake in Bank of India to 8.38% on May 14.

Conclusion

LIC’s Q4FY25 results reflect a solid turnaround driven by disciplined cost management, robust investment performance, and a sharpened focus on profitability despite pressures on premium growth.

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