LIC, the iconic Life Insurance Corporation of India, witnessed a remarkable surge of nearly 9% in its shares, soaring to Rs 1,130 during Monday’s intraday trade on BSE. This upward momentum stems from two significant developments, marking a pivotal moment for the corporation and its investors.
Tax Refund
The first catalyst behind LIC’s surge lies in its recent tax refund from the Income Tax Department, totaling a staggering Rs 21,740.77 crore. This substantial refund, pertaining to assessment years spanning from 2012 to 2020, injected a renewed vigor into LIC’s financial outlook.
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Although the total refund amounted to Rs 25,464.46 crore, the corporation received Rs 21,740.77 crore in February, with efforts underway to reconcile the remaining balance with the tax department.
Amritbaal
In addition to the tax refund windfall, LIC introduced a new endowment plan named Amritbaal, a traditional policy tailored for parents aspiring to secure their children’s future educational needs. This non-linked, non-participating plan is designed to accumulate a substantial corpus over the long term, ensuring financial stability for educational pursuits.
Key Features
LIC’s Amritbaal is meticulously crafted to address the burgeoning educational expenses and other financial needs of children. With a minimum entry age of 30 days and a maximum age of 13 years, this plan offers guaranteed additions at the rate of Rs 80 per thousand basic-sum assured annually throughout the policy term, provided the policy remains in force.
Financial Performance
LIC’s impressive performance reflects its robust financial health and market resilience. In Q3 FY24, the corporation reported a standalone net profit of Rs 9,444 crore, marking a significant 49% increase from the previous year’s quarter. The net premium income for the quarter also witnessed a commendable 5% year-on-year rise to Rs 1.17 lakh crore.
For the nine-month period ending December 2023, LIC reported a net profit of Rs 26,913 crore, showcasing a substantial growth trajectory compared to the previous fiscal year.
Technical Insights
From a technical standpoint, LIC exhibits a relative strength index (RSI) of 62.8, indicating a balanced trading territory without venturing into overbought or oversold zones.
With a beta of 0.6, the stock reflects low volatility, providing investors with a stable investment avenue. Moreover, LIC shares are trading above key moving averages, reinforcing investor confidence in its long-term prospects.
Conclusion
LIC’s recent surge underscores its resilience and strategic initiatives, positioning the corporation for sustained growth and value creation in the insurance landscape.
