For LIC the ratio is only 0.77. But the ratio of SBI Life is 3.30. LIC’s EV growth for the half-year ended 31 March 2022 was only 0.3%; But SBI Life’s growth is 12.3%. Because LIC has been operating for a long time its EV is very high. But the future growth rate of EV will be limited.
LIC’s EV last year was 13.7 times SBI’s EV; But LIC’s premium income is only 7.3 times that of SBI. Because LIC’s premium growth is low. So LIC Future growth of EV is unlikely to be high.
Unless LIC’s future premium income, profitability and EV continue to grow significantly, its share price is unlikely to rise significantly. High growth will be a big challenge for LIC, the largest company.
Only 3.5% of LIC’s shares are listed. And this percentage may rise steadily in the future. The more shares are in circulation in the stock market, the more likely the price will fall.
Therefore, at current prices, LIC It is better to avoid investing in stocks.
–S. Venkatraman, Founder, 6sigmawealth.com