Founded in 1956, the Life Insurance Corporation of India (LIC) has played an integral role in providing financial protection and investment opportunities to generations of Indians. Over the decades, it has evolved from a government-led initiative into a sprawling life insurance empire—one that continues to adapt to India’s changing financial needs. In this article, we draw from factual data, verified financial disclosures, and publicly available reports to assess how it holds up in today’s dynamic investment ecosystem.
What Does LIC Actually Do?
It is India’s largest life insurance provider, operating across urban and rural landscapes with a diverse product lineup. It offers:
- Term Insurance to protect families financially
- Endowment and Money-back Plans that mix insurance with savings
- Pension and Annuity Schemes for retirement planning
- Unit Linked Insurance Plans (ULIPs) for market-linked returns
Beyond insurance, it is also one of the country’s largest institutional investors. As of 2025, it holds major stakes in publicly traded companies like ITC, State Bank of India (SBI), and Larsen & Toubro (L&T), making it a pivotal player in India’s capital markets. This dual role—protector and investor—makes LIC unique among insurers.
How Is LIC Performing on the Stock Market?
As of May 14, 2025, LIC trades at ₹826.40 on the NSE. It reached a 52-week high of ₹1,222 and a low of ₹715.30. With a market cap exceeding ₹5.25 lakh crore, it ranks among India’s most valuable companies.
- Earnings Per Share (EPS): ₹64.69
- Book Value Per Share: ₹131.37
- Dividend Per Share: ₹10.00
- P/E Ratio: 12.14
- P/B Ratio: 6.31
This performance, sourced from Moneycontrol, reflects its strong profitability despite its PSU (Public Sector Undertaking) status.
How Do LIC’s Financials Stack Up?
The insurance conglomerate’s Q3 FY25 performance (as reported by Reuters):
- Total Revenue (FY24): ₹8.86 trillion
- Net Profit (Q3 FY25): ₹11,008.65 crore (17% YoY increase)
- Solvency Ratio: 2.02 (IRDAI minimum is 1.5)
- Net Premium Income: ₹1.07 trillion
The surge in profit was largely due to a shift toward high-margin non-participating products and optimization of employee-related expenses.
How Does LIC Compare with Private Insurers?
| Metric | LIC | SBI Life | HDFC Life | ICICI Pru | Max Financial |
|---|---|---|---|---|---|
| P/E Ratio | 12.14 | 72.26 | 87.39 | 73.59 | 136.07 |
| P/B Ratio | 6.31 | 10.27 | 9.80 | 7.31 | 10.19 |
| Return on Equity (ROE) | 49.44% | 14.20% | 11.20% | 9.93% | 8.79% |
| Net Profit Margin | 4.35% | 2.06% | 1.86% | 1.67% | 0.84% |
| Current Ratio | 3.09 | 1.39 | 1.03 | 1.29 | 1.02 |
| Debt-to-Equity | 0.00 | 0.00 | 0.18 | 0.22 | 0.13 |
Sourced from Groww, these metrics highlight that despite a lower market valuation, LIC outperforms private peers on core profitability ratios.
What Gives LIC Its Strength?
These insights are gathered from regulatory filings and investor presentations:
- Sovereign Guarantee: All its rules and regulations are backed by the Government of India.
- Massive Distribution Network: Over 1.3 million agents and 2,000+ branches.
- Stable Returns and Dividends: Regular payouts and capital protection appeal to conservative investors.
- High Operational Leverage: Recent digitization and HR rationalization are contributing to efficiency gains.
Where Does Life Insurance Corp Lag Behind?
- Slow Digital Transition: Private peers like HDFC Life have taken the lead in app-based onboarding.
- High Employee Costs: Legacy cost structures remain a profitability drag.
- Public Sector Discount: The stock’s lower valuation partially stems from investor skepticism toward PSU governance.
What’s in LIC’s Future Playbook?
Based on announcements from its annual reports and media coverage:
- Product Reorientation: Focus on non-par policies for higher margins.
- Strategic Investments: Increased stake in Bank of India to 8.38% (May 2025).
- Technology Push: It is enhancing its app and backend systems to match private sector agility.
Read full coverage on Economic Times
Who Should Consider LIC in Their Portfolio?
Best Suited For:
- Investors prioritizing capital preservation over aggressive growth
- Individuals nearing retirement who prefer dividend income
- Those seeking stable long-term exposure to India’s financial sector
Less Suited For:
- Momentum or swing traders
- Growth-focused portfolios that require higher EPS expansion
- Investors who prefer private sector corporate governance
Final Word
This assessment is based on verified data and industry comparison reports as of May 2025. LIC’s legacy, consistent profitability, and strategic roadmap give it long-term relevance. However, investor expectations around efficiency, digitization, and governance will be the deciding factors in its future re-rating.
Disclaimer: This blog is for educational purposes only. It is not financial advice. Always consult a SEBI-registered financial advisor before making investment decisions.
We have also done blogs on other insurance companies like SBI Life Insurance, We regularly cover Post Market Summaries, Tariff, M&A news, Surge/fall in stock prices, and general topics like VIX, Trading Strategies. Stay footed on our blogs and invest wisely!
