LIFE INSURANCE CORPORATION OF INDIA fair value — is it overvalued?
The fair value of LIFE INSURANCE CORPORATION OF INDIA (LICI), built from its filed accounts — ten years of results, the method that fits this business, and what today's price already assumes.
The market expects much less from LIFE INSURANCE CORPORATION OF INDIA than it has delivered before.
At today’s share price, buyers are paying about -19.3× the embedded value of the new business LIFE INSURANCE CORPORATION OF INDIA writes. The model values the new policies LIFE INSURANCE CORPORATION OF INDIA is writing at about 25× their embedded value. That is a big step down from its own record. Either the market can see a problem that the published accounts do not show yet, or it is expecting a slowdown that has not happened.
What the market is assuming
Worked backwards from today's share price: the new-business multiple today’s price implies for LIFE INSURANCE CORPORATION OF INDIA, against what the model assumes.
How to read this. The number on the left is the new-business multiple today’s share price quietly takes for granted. The number on the right is what the model actually assumes. When the two are far apart, that gap is the bet you would be taking.
The numbers behind them
Revenue and net profit as filed, in ₹ crore.
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2025 | 8,92,146 | 48,320 | 5.4% |
| FY2026 | 9,81,779 | 57,453 | 5.9% |
How this company gets valued — and why
A life insurer is not valued on its reported profit. Most of its worth sits in policies already sold, which will pay out over decades — and writing new business actually reduces this year's reported profit while creating value that lasts. It is valued on embedded value plus the value of new business instead, which is the measure the industry itself uses.
Embedded value — the correct lens for a life insurerUnderstand this method
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The complete valuation
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- ✓Fair value per share — with the full working behind it
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Compare with peers
The same valuation, run side by side.
LIFE INSURANCE CORPORATION OF INDIA vs HDFC LifeBoth life insurers, one state-owned and one private.→LIFE INSURANCE CORPORATION OF INDIA vs SBI LifeThe bank-backed private comparison on the same measures.→LIFE INSURANCE CORPORATION OF INDIA vs ICICI Prudential LifeA third private life insurer, on a smaller book.→LIFE INSURANCE CORPORATION OF INDIA vs HDFC BankA life insurer valued on embedded value against a bank valued on excess return — two models, one disclosure standard.→LIFE INSURANCE CORPORATION OF INDIA vs State Bank of IndiaBoth state-controlled financial giants, on very different balance sheets.→Frequently asked
Is LIFE INSURANCE CORPORATION OF INDIA overvalued?
At ₹408 the market is pricing in roughly -19.3% sustained VNB, against the ~25.0% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of LIFE INSURANCE CORPORATION OF INDIA?
It is computed from the filed financial statements using the method that fits this business (embedded value), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How does FairStocks calculate fair value?
From published financial statements. The method is chosen to fit the business — a bank on excess return, a regulated utility on its rate base, a conglomerate by its parts — and every assumption is shown with its source. When the numbers do not support an estimate, no estimate is published. This is an educational research tool: it reports what the model computed and does not recommend buying or selling anything.
What assumptions are used to value LIFE INSURANCE CORPORATION OF INDIA?
A cost of capital of 10.98%, growth drawn from the company's own record rather than from guidance, and the valuation method that fits the business. All of them are listed in the report, with how much each one moves the answer.