Q2 premium, margin growth boost analysts' bullish outlook on LIC stock

Emkay Global Financial Services has retained its 'Add' rating on the insurance behemoth, while Motilal Oswal Financial Services (MOFSL) has maintained its 'Buy' recommendation

Brokerages remain bullish on insurance giant Life Insurance Corporation of India (LIC) after the insurer posted strong performance in the second quarter of FY26 (Q2FY26).

 

Emkay Global Financial Services has retained its 'Add' rating on the stock, while Motilal Oswal Financial Services (MOFSL) has maintained its 'Buy' recommendation following LIC’s announcement of a consolidated net profit of ₹10,098.48 crore in Q2FY26, up 31 per cent from ₹7,728.68 crore in the same quarter last year.

 

For the first half of FY26 (H1FY26), LIC’s net profit rose 16.36 per cent year-on-year (Y-o-Y) to ₹21,040 crore. The insurer’s net premium income for the quarter stood at ₹1,26,930.04 crore, marking a 5.5 per cent Y-o-Y increase and a 6.1 per cent sequential rise. On a half-yearly basis, total premium income grew 5.14 per cent to ₹2,45,680 crore. Indian Embedded Value (IEV) also saw growth, increasing by ₹36,354 crore between March 2025 and September 2025, a rise of 4.68 per cent, according to an exchange filing.

 

 

On the stock front, LIC shares were trading at ₹903.50 apiece on the BSE, up 0.83 per cent from the previous close of ₹896.10 at 9:47 AM on Friday, November 7.

Emkay sticks with LIC 'Add' after Q2 beat

Avinash Singh, senior research analyst at Emkay Global, retained an Add rating on LIC, with an unchanged Sep-26E target price of ₹1,100, implying 0.7x FY27E P/EV.

 

Singh noted that LIC delivered a healthy H1FY26 performance, with Annual Premium Equivalent (APE) at ₹29,030 crore (up 3.6 per cent Y-o-Y), 2 per cent above estimates. The Value of New Business (VNB) margin stood at 17.6 per cent (up 140 bps Y-o-Y), higher than the estimate of 16.8 per cent. The margin expansion, Singh said, was driven by a higher share of non-par products, increased product-level margins via higher ticket sizes and sum assured, and favorable movements in the yield curve. 

 

“Going forward, management plans to continue selling products aligned with customer demand and focus on growing absolute VNB. The impact of GST ITC losses on VNB margins is expected to be offset by higher volumes, better product-level margins, and improved operating efficiency,” Singh said in a research report.

 

To factor in Q2 developments, Emkay Global has tweaked its estimates, raising APE and VNB margin projections by 2 per cent and 50 bps, respectively, translating into a 5 per cent increase in VNB over FY26–28E.

 

“Trading at a material discount to EV and generating consistent GAAP profits, VNB margin matters less for LIC shares. To attract growth investors, LIC will need either superior Retail APE growth or higher dividend payouts to appeal to value investors,” said the brokerage. 

MOFSL maintains 'Buy' on margin gains

Motilal Oswal Financial Services analysts have retained a Buy rating on LIC, with a Sep-27E target price of ₹1,080 (0.6x EV), citing strong quarterly profitability driven by a rising contribution from the non-par business.

 

The brokerage noted that LIC continues to maintain an industry-leading position and is expected to see robust growth, supported by diversified product offerings, larger ticket sizes, better agency productivity, continued growth in bancassurance and alternate channels, and strong post-GST exemption demand.

 

“A shift toward higher-margin non-par products and improving persistency will support VNB margin growth. The company is also enhancing digital capabilities to optimise costs,” MOFSL said.

 

While APE estimates remain unchanged, MOFSL has raised VNB margin projections by 80 bps/80 bps/100 bps for FY26/FY27/FY28, alongside a slight reduction in commission estimates, resulting in a 10 per cent rise in earnings across the three years.