Shares of Life Insurance Corporation of India (LIC) traded with a positive bias on Friday, August 7, following the announcement of the insurance titan's financial performance for the first quarter of the fiscal year 2026-27 (Q1 FY27). Investor enthusiasm was stoked by a healthy growth in overall profitability, steady expansion in premium collection, and a substantial jump in margins from newly underwritten policies.
Net Profit Surges 23% Alongside Steady Premium Growth
The state-owned insurer posted a standalone net profit of Rs 13,492 crore for the April-June quarter, reflecting a 23% year-on-year expansion compared to Rs 10,986 crore recorded in the corresponding period of the previous financial year.
Total net premium income for the insurer moved up 7% year-on-year to reach Rs 1.27 lakh crore. Growth was well-distributed across policy categories: premium generated from individual insurance business climbed 6% to Rs 75,416 crore, while group insurance business premium advanced 9% to touch Rs 51,834 crore. In terms of volume, LIC sold 31.02 lakh individual policies during the quarter, registering an increase over the 30.4 lakh policies issued in the same quarter last year.
Dominance in Indian Life Insurance Sector Intact
The first-quarter metrics underscored LIC's continuing leadership position across the domestic market landscape. During the June quarter, LIC commanded 60.10% of India's first-year premium income.
The company maintained a 38.89% market share in the individual life insurance segment and a dominant 70.90% market share in the group insurance category, reflecting the vast reach of its agency force and strong corporate connections throughout India.
VNB Jumps 61% as Product Mix Shifts to Non-Par Policies
A key highlights of the quarterly results was the sharp rise in the profitability of new business written by the insurer. LIC's Value of New Business (VNB), which measures the present value of future profits expected from policies sold during the period, surged 61% year-on-year to Rs 3,136 crore.
The VNB margin saw a significant expansion to 22.90%, up from 15.40% reported in the same quarter of the previous year. This margin expansion was primarily fueled by an increased share of non-participating (non-par) insurance products, which accounted for 32.49% of individual business premium compared to 30.34% a year ago. Non-par products offer higher profit margins for insurers because investment returns are not shared directly with policyholders.
Stock Performance Details on the NSE
Reacting to the earnings announcement, LIC shares were quoting at Rs 393.00 on the NSE around 11:50 AM, up 1.41% or Rs 5.45 from the previous market close.
The stock had opened the session at Rs 393.45 and registered an intraday high of Rs 396.85. During trading, the stock experienced a brief dip to an intraday low of Rs 391.10 before resuming its upward momentum.
Motilal Oswal Reiterates Buy Call with Revised Target Price
Brokerage firm Motilal Oswal reaffirmed its bullish stance on the insurer following the Q1 results. Maintaining a 'BUY' rating, the brokerage revised its target price to Rs 480 per share, valuing the stock at 0.6x FY28E Embedded Value.
Analyst estimates for VNB margins in FY27 and FY28 were upgraded on the back of strong first-quarter execution and an expanding non-par product portfolio. The brokerage expects LIC to deliver an operating RoEV in the range of 11.5% to 12.0% going forward.
