LIC’s Q1 Profit Jumps 5% to Rs. 10,987 Crore: What’s Next?

LIC’s Strong Q1 Performance Lifts Investor Sentiment: Life Insurance Corporation of India (LIC) reported a standalone net profit of Rs. 10,987 crore for Q1FY26, marking a 5% year-on-year rise from Rs. 10,461 crore in Q1FY25. The announcement on August 7 was followed by a sharp 4% jump in share price the next morning, pushing the stock to Rs. 927 apiece. Investors are now weighing whether this momentum can be sustained.

Net Premium Income Growth Signals Business Strength: LIC’s net premium income for April–June 2025 climbed to Rs. 1.19 lakh crore, up 5% from Rs. 1.14 lakh crore a year ago. This growth reflects continued demand for LIC’s insurance products, supported by a broader product mix and a focus on high-ticket, non-par policies. Analysts believe this strategic shift will help boost profitability in the coming quarters.

Asset Quality and Solvency Ratio See Marked Improvement: The insurer’s solvency ratio improved to 2.17% in Q1FY26 from 1.99% a year earlier, signaling a stronger financial position. Asset quality also saw gains, with gross NPAs dropping 21% to Rs. 8,436.5 crore and net NPAs falling 36% to just Rs. 4 crore. The gross NPA ratio declined to 1.42% from 1.95%, underscoring better risk management and portfolio health.

Brokerage Houses Maintain Bullish View Despite Price Cuts: Motilal Oswal retained its ‘Buy’ call but lowered the target price from earlier levels to Rs. 1,080, still implying a 22% upside from the last close. The brokerage expects LIC to benefit from stronger non-par sales, better persistency, and cost optimization through digital upgrades. Meanwhile, Macquarie set a Rs. 1,215 target (37% upside) and Citi remains most optimistic with a Rs. 1,370 target (55% upside).

Stock Performance – Short-Term Volatility, Long-Term Promise: Despite recent gains, LIC shares have dropped 3% in the past month, reflecting market-wide volatility. However, the stock has climbed nearly 14% over the past six months and trades at a P/E ratio of 11.69, well below many private insurance peers. This valuation gap is one reason analysts see significant upside potential.

LIC’s Growth Strategy for the Future: LIC continues to focus on expanding its agency network, strengthening bancassurance tie-ups, and introducing more high-margin non-par products. Digital transformation remains a priority to improve cost efficiency and customer reach. The company’s leadership is confident these measures will drive sustainable growth and better margins in the years ahead.

Should You Buy, Sell, or Hold LIC Stock? : With multiple brokerages projecting 22–55% upside, the consensus leans toward buying LIC at current levels. The insurer’s improving asset quality, robust premium growth, and solid solvency ratio make it a compelling long-term play. However, near-term price swings and broader market conditions could affect short-term returns, making patience a key factor for investors.

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