LIC has received multiple buy ratings from leading brokerages following its strong Q1FY27 performance and successful OFS completion. Elara Capital is the most bullish with a 'Buy' rating and target price of ₹635, followed by HDFC Securities with an 'Add' rating and target price of ₹555. Jefferies also maintains a 'Buy' rating with a target price of ₹530, while Motilal Oswal has retained its 'Buy' call with a target price of ₹480. The consensus reflects confidence in LIC's strategic shift towards higher-margin non-participating (non-PAR) products and improving operational metrics. Emkay Global has also reiterated its 'Buy' rating on LIC and retained a target price of ₹550, implying an upside of around 42% from current market price.
In the first quarter of FY27, LIC delivered robust financial results with net premium income of ₹1.27 lakh crore, representing a 7% year-on-year growth. As reported by Motilal Oswal, renewal premium increased 3% YoY to ₹618 billion, while single premium grew 9% YoY to ₹564 billion. The company's first-year premium demonstrated exceptional growth of 22% YoY to ₹92 billion, indicating strong market penetration and customer acquisition. LIC shares rose 2.5% to ₹397 on the BSE following the earnings announcement, with the stock gaining momentum on the strong quarterly performance. The insurer reported 8.2% growth in Annualised Premium Equivalent (APE), while Value of New Business (VNB) surged 61.3% and VNB margins expanded 750 basis points year-on-year to 22.9%.
According to the latest reports, LIC's strategic focus on profitable products is yielding significant results. Sales of guaranteed non-PAR savings products increased 59% during the quarter, while retail protection business grew 44%. The company's Absolute Value of New Business (VNB) showed remarkable growth of 61% YoY to ₹3,136 crore, resulting in a significant 750 basis points YoY expansion in VNB margin to 22.9% from 15.4% a year earlier. LIC sold 31.02 lakh individual policies during the June quarter, up 2% from 30.40 lakh policies in the year-ago period. Jefferies noted that LIC has nearly closed the profitability gap with private insurers, with the difference now narrowing to 200-300 basis points, expecting LIC's VNB growth between FY26 and FY29 at 16%, almost in line with private sector peers.
The insurer retained its leadership position in the domestic life insurance market with an overall 60.1% share of first-year premium income, according to IRDAI data. During the quarter, LIC held a 38.89% market share in individual business and 70.9% in group business. Individual business premium increased 6% to ₹75,416 crore from ₹71,474 crore a year ago, while group business premium rose 9% to ₹51,834 crore from ₹47,726 crore. Shareholder profit after tax (PAT) rose 23% YoY to ₹13,492 crore, demonstrating strong bottom-line performance and the company's ability to convert premium growth into profitability. Motilal Oswal believes the company's improving product mix, better persistency, larger-ticket policies and its vast network of 14.5 lakh agents will continue to support earnings growth.
LIC's latest OFS concluded with strong participation from both institutional and retail investors, with the institutional tranche subscribed 3.32 times the base issue size and retail portion subscribed 1.82 times its base issue size. After the completion of the transaction, public shareholding increased to 10% while the government's stake declined to 90%. LIC stock rebounded after a bruising 10% fall following the government's discounted offer-for-sale, with analysts calling it undervalued and assigning targets as high as ₹800, double from current market price. Sharad Avasthi from SMIFS noted that LIC could become eligible for inclusion in the Nifty Next 50 and Nifty 100 during the March 2027 review, which could attract flows of over $100 million if included. If LIC qualifies for the MSCI Index, the stock could see inflows of around $450-500 million. Jefferies noted that LIC trades at just 0.5x FY27 estimated embedded value, despite the narrowing profitability gap with private insurers, while brokerages value the stock in the range of 0.6-0.8x FY28 embedded value.
