LIC shares jump 4% after Q1 net profit jumps 5%; should you buy, sell or hold?

LIC shares jump 4% after Q1 net profit jumps 5%; should you buy, sell or hold?

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26 Aug, 2025 12:21

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The shares of Life Insurance Corporation of India (LIC) jumped more than 4 percent in morning trade on August 8, a day after the insurer released its results for the first quarter of the financial year 2026. Brokerages remain bullish on the stock, seeing up to 55 percent upside potential.

The insurer, on August 7, reported a standalone net profit of Rs 10,987 crore for Q1FY26. This marks a rise of 5 percent on-year from the Rs 10,461 crore net profit reported in Q1FY25.

The firm’s net premium income also rose 5 percent year-on-year to Rs 1.19 lakh crore during the April-June quarter of financial year 2026. The insurer had earlier reported net premium income at Rs 1.14 lakh crore during the corresponding quarter of the previous financial year.

LIC's solvency ratio rose to 2.17 percent in Q1 FY26, from 1.99 percent in Q1 FY25. Asset quality meanwhile improved, with gross non-performing assets (NPA) and net NPA reducing 21 percent and 36 percent on-year to Rs 8,436.5 crore and Rs 4 crore respectively. Gross NPA ratio stood at 1.42 percent during the quarter under review, as against 1.95 percent in the same period last year.

Motilal Oswal Financial Services kept a ‘Buy’ call on the stock, but reduced its target price to Rs 1,080 apiece. The latest target price implies an upside potential of over 22 percent from the stock’s previous closing price. The domestic brokerage kept its FY26 and FY27 earnings estimates unchanged for the firm, due to Q1 earnings being in line with estimates.

“LIC maintains its industry-leading position and focuses on achieving growth recovery through wider product offerings, higher ticket sizes, a shift in the product mix toward non-par, agency channel expansion, and a higher contribution from bancassurance and alternate channels. A shift toward higher margin non-par products and improvement in persistency will boost VNB margin going forward. The company is also working on enhancing its digital capabilities for cost optimization,” Motilal Oswal said.

Macquarie maintained an ‘Outperform’ rating on the stock, with a target price of Rs 1,215 per share. This implies an upside potential of more than 37 percent from the previous closing price. Citi meanwhile kept a ‘Buy’ call on the stock, with a target price of Rs 1,370 apiece, implying a strong upside potential of 55 percent.

LIC shares were trading at Rs 927 apiece in the morning. The stock dropped 3 percent in the past one month, but gained nearly 14 percent in the past six months. It currently has a P/E ratio of 11.69.