Life Insurance Corporation of India (LIC) has announced its Q2 results for the fiscal year 2024, revealing a 13.77% increase in revenue compared to the same period last year. However, the results also showed a year-over-year profit decline of 3.76%, highlighting mixed performance during the quarter.
Revenue Growth and Profit Decline
In comparison to the previous quarter, LIC reported a revenue growth of 9.04%. Despite the topline growth, profits dropped significantly by 26.7% quarter-over-quarter, signaling short-term challenges in operational efficiency.
The company’s operating income also saw declines, decreasing by 32.09% quarter-over-quarter and 18.69% year-over-year, raising concerns about sustained profitability. Additionally, earnings per share (EPS) for Q2 stood at ₹11.34, reflecting an 11.22% year-over-year drop.
Cost Management and Strategic Efforts
Selling, General & Administrative (SG&A) expenses increased by 6.56% quarter-over-quarter but decreased by 22.2% year-over-year, indicating LIC’s efforts to control costs over the long term. While these efforts highlight some operational improvements, the overall impact on profitability remains a concern.
Stock Performance and Market Sentiment
Despite challenges in profitability, LIC’s stock performance has shown resilience. The company delivered a return of 0.72% in the last week, 3.05% over the past six months, and a notable 11.68% year-to-date. LIC’s market capitalization as of November 9, 2024, stands at ₹588,035.1 Cr, with its stock price showing significant volatility over the past year, ranging between ₹598.25 (52-week low) and ₹1222 (52-week high).
Analysts’ Ratings
Out of 18 analysts covering LIC, there is a mixed sentiment:
- Sell: 3 analysts
- Hold: 4 analysts
- Buy: 3 analysts
- Strong Buy: 8 analysts
The consensus recommendation is a Buy, reflecting confidence in LIC’s long-term potential despite short-term profitability challenges.
