Synopsis:
Life Insurance Corporation of India surged today after it reported a stellar business performance. Additionally, CITI further expects the stock to rise by another 55% from its current level.
The shares of this fourth-largest insurer in the world are in focus after reporting a robust performance in Q1 FY26. In this article, we will dive more into the details.
With a market capitalization of Rs 5,78,769 crore, the shares of Life Insurance Corporation of India are currently trading at Rs 915 per share, representing a percent decline from its 52-week high of Rs 1,159.60 per share.
Leading brokerage house, CITI, has assigned a “Buy” call on the stock with a target price of Rs 1,370 per share, signalling an upside potential of 55 percent from its previous day closing price of Rs 885 per share.
Citi is optimistic about LIC’s performance in Q1 FY26, noting a solid 21 percent year-over-year increase in the value of new business (VNB), largely thanks to an improved product mix. VNB margin expanded from 13.9 percent in Q1 FY25 to 15.4 percent in Q1 FY26.
The insurer has been selling higher-margin non-participating policies and larger-ticket products, which have helped boost its margins. Additionally, lower expenses have contributed positively to profitability.
On the distribution front, LIC is starting to show some promising signs of improvement in its agency network. They have more active agents, higher average coverage per policy, and a younger, expanding agent base.
While growth in individual business is still a bit sluggish and there are concerns about maintaining market share, Citi believes that LIC is in a strong position to reap the benefits in the long run from its focus on profitable products and enhanced distribution efficiency.
Q1 Highlights
LIC’s revenue for Q1 FY26 came in at Rs 2,24,671 crore, registering a 6 percent growth from Rs 2,11,952 crore in the same quarter last year. However, on a sequential basis, revenue declined by 8 percent from Rs 2,43,134 crore in Q4 FY25.
Coming to its profitability, the company reported a net profit growth of 4 percent to Rs 10,955 crore in Q1 FY26 as compared to Rs 10,527 crore in Q1 FY25. However, on a QoQ basis, it declined by 42.5 percent from Rs 19,039 crore.
Asset Under Management (AUM) also grew by 6.47 percent to reach Rs 57.05 lakh crore in Q1 FY26 from Rs 53.58 lakh crore in Q1 FY25. LIC’s policy volumes saw a notable drop in Q1 FY26. Its market share by number of policies fell 3.47 percent to 63.07 percent from 66.54 percent a year ago. Individual policy sales declined 14.75 percent to 30.39 lakh, while sales through bancassurance and alternate channels plunged 59 percent to just 38,462 policies.
The insurer continues to dominate in agent-based distribution, holding a 47.11 percent market share by number of agents, but the overall decline in policy volumes highlights the challenge of stabilising its market position.
Written by Satyajeet Mukherjee
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