Life Insurance Corporation of India reports a 23% rise in quarterly profit, driven by a 61% jump in new business value and wider profit margins, leading brokerages to upgrade their outlook on the stock amid sector-wide profit improvements.
Life Insurance Corporation of India posted a 23% rise in June-quarter profit as the state-owned insurer delivered a sharp improvement in new-business profitability, prompting several brokerages to lift their price targets and keep a positive view on the stock. LIC said consolidated net profit rose to Rs 13,492 crore from Rs 10,987 crore a year earlier, while total income increased to Rs 2,37,848 crore. Shares were up 1.65% at Rs 393.95 on Thursday morning in Mumbai trading.
The most closely watched figure was value of new business, or VNB, which climbed 61% to about Rs 3,100 crore. The VNB margin widened to 22.9% from 15.6% a year earlier, reflecting a shift towards more profitable products. Brokerage notes cited stronger sales of non-participating savings and protection plans, along with higher-ticket policies, as key reasons for the better margin profile.
Macquarie raised its target price to Rs 550 and said the valuation still looks attractive, while Jefferies lifted its target to Rs 530 from Rs 480 and said LIC’s margin gap with private insurers has narrowed meaningfully. Bernstein kept an Outperform stance and a Rs 500 target, saying the insurer continues to benefit from a move towards higher-margin products and that the government’s earlier offer for sale has removed a major overhang. Goldman Sachs stayed Neutral with a Rs 475 target, and Motilal Oswal reiterated Buy with a Rs 480 target.
The upbeat tone around LIC also fits a wider trend in the insurance sector, where peers have reported improving profitability and stronger VNB margins. ICICI Prudential Life recently reported a rise in quarterly profit and a VNB margin of 26.7%, while SBI Life has guided for a FY27 VNB margin of 26% to 28% as it leans further into higher-margin traditional and protection business. For LIC, analysts said the next leg of gains will depend on continued mix improvement, operating discipline and how interest rates evolve.
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