The super-normal growth in net profit is primarily attributed to a base effect and a change in accounting entry, involving a transfer of funds from non-participating policies to shareholders account as a part of accretion on the available solvency margin, according to a regulatory filing.
In the previous fiscal’s June quarter, LIC’s net profit was ₹682.9 crore.
Sequentially, the company’s profit has fallen 29%. In March 2023 quarter, the net profit stood at ₹13,427.8 crore.
During the first quarter, LIC’s net premium income increased to ₹98,362.7 crore from ₹9,8351.7 crore in the same period of previous fiscal. However, LIC saw a decrease of 25% in net premium from ₹1.3 trillion in March quarter of FY23.
LIC’s total premium income for the June quarter stood at ₹98,363 crore, a marginal y-o-y increase.
LIC collected ₹60,224 crore in new business premium during April-July, down 22.11% as compare to same period of last year.
LIC’s stock closed 0.29% down at ₹642.10 apiece on the BSE on Thursday.
“Our overall expense ratio has become better and our margins are stable on year-on-year basis,” said Siddhartha Mohanty, chairperson, LIC.
“During the first quarter of this financial year, we have achieved increase in our Non-Par product mix as a percentage of the overall individual business. Further, our efforts to improve persistency across cohorts are beginning to show results. Simultaneously we continue to work on strategies for diversifying the channel mix.”
LIC’s total individual business premium for the quarter ended June increased to ₹62,773 crore from ₹60,007 crore for the comparable period of previous year registering a growth of 4.61%.
LIC’s total assets under management (AUM) increased by ₹5.09 trillion to ₹46.11 trillion as on 30 June 2023, as compared to ₹41.02 trillion on 30 June last year.
According to a 27 July Mint report, LIC witnessed the highest ever gains in the first quarter of a fiscal year, worth approximately $3.16 billion, or ₹25,900 crore. According to a research by Mint based on regulatory filings of 300 companies, in April-June, LIC sold shares in at least 87 leading Indian companies worth ₹25,900 crore—the highest ever for LIC in the first quarter of a financial year.
Through share sales, LIC has booked a profit of ₹30,000 crore in the first quarter alone, surpassing all past records for the first quarter of a fiscal year, according to a person aware of the development.
The insurer, according to the Mint research, yielded maximum gains by selling a bulk of the shares in bluechip companies, including fast-moving consumer goods major Hindustan Unilever Ltd ( ₹1,893.27 crore), Mukesh Ambani-led Reliance Industries Ltd ( ₹1,469 crore), car-maker Maruti Suzuki India Ltd ( ₹1,053 crore), cement manufacturer Ultratech Cement Ltd ( ₹1,312 crore), engineering and construction major Larsen & Toubro Ltd ( ₹1,260 crore), Britannia Industries Ltd ( ₹996 crore) and Bajaj Auto Ltd ( ₹2,025.8 crore).
Besides, as stocks of most leading listed companies posted steady gains during the quarter, LIC, as a part of its investment strategy, sold the shares of food giant Nestle India Ltd for ₹981 crore, NTPC Ltd ( ₹958.8 crore), Titan Co. Ltd ( ₹877.9 crore) and Power Grid Corp. Ltd ( ₹762.5 crore).
LIC market share in terms of new business premium for the April-July period has fallen to 59.70% from 68.57% during the same period of last year.
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Updated: 11 Aug 2023, 12:05 AM IST