Life Insurance Corporation (LIC:IN) PT Lowered to INR1,255 at Citi
2024.05.29 06:44
Citi analysts lowered the price target on Life Insurance Corporation (IN) to INR1,255.00 (from INR1,295.00) while maintaining a Buy rating.
The analysts comment: “LIC reported 25% ROEV in FY2024; significantly lower than ~100% rise in FV change in policyholders’ account. ~40-50% of FY2023 EV consisted of MTM releases. In FY2023, majority of MTM releases were from non-par (100% pass through to EV). While we await granular disclosure on the segmental balance sheet (from annual report), back-of-the-envelope calculation suggests significantly higher MTM gains in par in FY2024 (on YoY basis) compared to non-par. As such, despite reporting ~7% higher investment book (>Rs3tn) than Visible-alpha based consensus (in-line with Citi), ROEV remained contained (~Rs2.5tn lower EV than Citi). Core business performance was subdued with margin pressure in par and group; momentum in non-par, however, remains encouraging. We reset FY2024 EV resulting in 21-23% cut to FY2025-26E EV. Incrementally, we capture FY2024 MTM release (~ +50% YoY) at 40% haircut, for valuation, compared to FY2023 MTM at 20% haircut, captured, earlier. TP Rs1,255. Buy.”
