Buy Life Insurance Corporation; target of Rs 1080: Motilal Oswal

Motilal Oswal's research report on Life Insurance Corporation

In 2QFY26, LIC reported net premium income of INR1.3t (in line), which grew 5% YoY. Renewal premium grew 5% YoY to INR650b and single premium grew 8% YoY to INR508b. First year premium declined 3% YoY to INR108b. New business APE declined 1% YoY to INR164b (in line), with individual APE declining 11% YoY to INR101b and group APE rising 24% YoY to INR62.7b. For 1HFY26, APE grew 4% YoY to INR290.3b.

Outlook

We have kept our APE estimates unchanged. However, we have increased our VNB margin estimates by 80bp/80bp/100bp for FY26/27/28, considering the 1HFY26 performance, and slightly reduced our commission estimates, leading to ~10% rise in earnings for FY26/27/28. Reiterate BUY with a TP of INR1,080 (premised on 0.6x Sep’27E EV).