LIC Upgraded to Buy with Target Price of ₹1,111 Amid Strong Performance

Life Insurance Corporation of India (LIC) has delivered robust quarterly results, surpassing expectations with a 9% year-on-year increase in total APE to ₹7,060 crore and a 150 basis point expansion in VNB margins to 15.4%. The company's VNB grew 21% y-o-y to ₹1,700 crore, driven by strong retail performance in ULIPs and a 23% rise in ticket sizes.

Improved operating metrics, including better mortality rates and persistency in high-ticket segments, alongside controlled operational expenses, contributed to margin strength. However, LIC's embedded value (EV) growth remains constrained, with VNB accretion accounting for less than 2% of opening EV despite solid VNB performance.

With the stock trading at 0.6x FY27e EVPS of ₹1,455—a significant discount—analysts see potential for rerating as product mix diversification and margin improvement bolster resilience. The Buy recommendation comes with an upgraded target price of ₹1,111, reflecting confidence in LIC's evolving growth profile.