Buy, Sell or Hold: Here's what brokerages said on LIC post 9% uptick in Q1 PAT

Following Life Insurance Corporation's (LIC’s) June quarter earnings on Thursday, several top brokerages came out with their views on the stock of India's largest state-run insurer. While JM Financial and Antique Stock Broking have reiterated their buy views on the counter, Investec has maintained a 'hold' stance.

LIC reported a consolidated net profit of Rs 10,544 crore for the first quarter ended June 2024 on Thursday, which was an increase of 9% from Rs 9,635 crore reported in the last-year quarter. Net premium income during the quarter increased 16% year-on-year to Rs 1.14 lakh crore as against Rs 98,755 crore in the corresponding quarter of the previous year.

In terms of market share measured by First Year Premium Income (FYPI) (as per IRDAI), LIC continues to be the market leader in Indian life insurance business with overall market share of 64.02%.


LIC shares were down by 5.4% on Monday, hitting the day's low of Rs 1,075.15 on the NSE.

Here's what brokerages said:

JM Financial: Buy | Target: Rs 1,300
The brokerage has reiterated a buy stance on LIC. With the strong focus and evidenced growth in individual APE (annual premium equivalent) in 1Q and clear visibility of margin improvement, JM raised its FY26 EV estimate by 2% to Rs 8,91,200 crore and raise our target multiple to 0.9x FY26e EV, to get a revised target trice of Rs 1,300.

JM said LIC's margins disappointed at 13.9%, however, this was well-explained by higher share of group business and decline in margins on the individual products, as G-sec yields contracted during the quarter, the brokerage said.

"We have been positive on LIC’s ability to grow its non-par business and strong EV returns, led by strong MTM gains — which have played out well. We recognise that APE growth beyond 1Q levels of 13%/34% in individual/group business will be difficult for LIC, given its already wide penetration," the brokerage note said.

Antique Stock Broking: Buy | Target: Rs 1,260
Factoring the Q1 beat, Antique increased its FY25-27E APE growth by 6%-7%, broadly maintain estimates on VNB and raised the target price to Rs 1,260 from an earlier target of Rs 1,160 based on implied 0.9x 1HFY27E P/EV. The brokerage has maintained a 'Buy' view on the counter.

Listing key risks, it said the impact of recent surrender value regulation and supply overhang could pose headwinds.

Investec: Hold | Target: Rs 875
Investec has maintained a 'Hold' view on the counter with target price of Rs 875. It said LIC saw a miss on the VNB margin front led by product mix change while APE for the quarter was a beat of 13% on estimates. Persistency decreased across cohorts.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)