Valuation matters
Despite good results and positive implications of a successful OFS, the LIC stock faces a valuation hurdle. According to Emkay Global Financial Services’ estimates, the stock is trading at price-to-VNB (similar to price-to-earnings ratio using economic profit) multiple of 28 based on FY27 financials. The brokerage is expecting VNB growth of 10% for FY28, and 9.1% for FY29. For most other companies, investors will hesitate to pay a price-to-earnings multiple of 29 for growth of 10% as it translates into PEG (price-to-earnings ratio/earnings growth) of almost 3x.
