LICI - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.7

📊 Core Financials & Profitability

Earnings Strength: LIC posted a quarterly PAT of ₹10,987 Cr, down from ₹19,013 Cr, yet still robust. EPS of ₹77.0 is strong for a ₹891 stock.

Return Metrics

ROE: 46.0% and ROCE: 53.4% — exceptional, indicating superior capital efficiency.

Debt Profile: Debt-to-equity at 0.00 — debt-free, a major strength in the financial sector.

Dividend Yield: 1.35% — attractive for long-term income investors.

💸 Valuation Indicators

Metric Value Insight

P/E Ratio 11.6 Deeply undervalued vs. industry PE of 73.5.

P/B Ratio ~4.46 Reasonable relative to book value ₹200.

PEG Ratio 0.09 Extremely attractive — growth is significantly undervalued.

🔍 Conclusion: LIC is trading at a steep discount to intrinsic value. PEG and P/E ratios suggest strong upside potential, especially given its dominant market position.

🛡️ Business Model & Competitive Edge

Core Operations: Life Insurance Corporation of India is the largest life insurer in India, with a vast distribution network and strong brand equity.

Strategic Strengths

Market cap over ₹5.6 lakh Cr and zero debt.

Institutional confidence: FII and DII holdings both increased slightly.

Strong premium collection base and bancassurance partnerships.

Growth Outlook

LIC has delivered 40.9% returns over 3 years with 10.1% quarterly revenue growth

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Citi maintains a “Buy” rating with a target price of ₹1,370 — ~55% upside

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Motilal Oswal revised its target to ₹1,080, citing improving business mix and VNB growth

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📉 Technicals & Entry Zone

RSI: 53.4 — neutral, offering buying comfort.

MACD: −3.20 — mild bearish divergence.

DMA Levels: Price hovering near both 50-DMA and 200-DMA — consolidation zone.

📌 Suggested Entry Zone: ₹875–₹890 — near DMA levels and technical support.

🕰️ Long-Term Holding Guidance

Hold if Invested: Strong fundamentals, undervaluation, and sector dominance support long-term compounding.

Buy on Dips: Prefer entry near ₹880, especially if RSI dips below 50.

Monitor: VNB growth, premium trends, and regulatory shifts.

You can explore LIC’s multi-year price targets and technical outlook

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or read Goodreturns’ analysis of LIC’s post-IPO performance and recovery prospects

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for deeper insights. Let me know if you'd like a peer comparison with HDFC Life or SBI Life next.

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stockpricearchive.com

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stockanalysis.com

3

www.goodreturns.in

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