Shares of Life Insurance Corporation of India (LIC) rose 9% to Rs 682.70 on the BSE in intra-day trade on Monday after the company posted an 11-fold jump in net profit at Rs 15,952 crore during the July-September (Q2) quarter of FY23. The multi-fold increase in net profit was due to a change in its accounting policy, in which it transferred Rs 14,272 crore from non-participating accounts to shareholders’ accounts.

LIC was trading 6% higher at Rs 663.95 on the BSE at 9:57 am, while the S&P BSE Sensex was down 0.1%. Over-the-counter volumes on the NSE and BSE have tripled, with a total of 4.8 million shares changing hands as of this writing.

The insurance giant reported a net premium income of Rs 1.32 trillion in Q2FY23, up 27% year-on-year from Rs 1.04 trillion in Q2FY22. Its first-year premium income rose 11% year-on-year to Rs 9,125 crore, while renewal premiums rose 2% to Rs 56,156 crore. Single premium income rose 62% year-on-year to Rs 66,901 crore.

In Q2FY23, investment income rose 9.89% YoY to Rs 84,104 crore. In the same period last year, investment income was Rs 76,534 crore.

The company’s business momentum in FY23 is strong. As a result, it gained market share on a first-year premium basis. LIC’s market share increased from 63.25% in FY22 to 67.72% in October. The total premium for the six months ending September 2022 is Rs 25,228 crore in annualised premium equivalent (APE).

LIC’s gross non-performing assets (total NPA) ratio fell 24 basis points quarter-on-quarter to 5.6% at the end of September. It reported a net NPA of Rs 12.71 crore in the second quarter.

“LIC has all the tools to maintain its industry leadership and accelerate growth in high-margin product segments (primarily conservation, non-PAR and savings annuities). However, shifting gears for such a large organisation requires good and thoughtful execution,” said Motilal Oswal Financial Services in the results update.

The brokerage expects LIC to post healthy APE growth due to a more optimised product mix and rising VNB margin trajectory. However, operating RoEVs should remain modest as profit margins are lower than their private sector counterparts. The brokerage said LIC was valued at 0.6x FY24E EV, which seems reasonable given the gradual recovery in margins and the diversification of the business mix.

LIC is trading at a 28% discount to its issue price of Rs 949 per share. It hit an all-time low of Rs 588 on October 21, 2022. The company made its stock market debut on May 17, 2022.