Insurance News Details

LIC shares rose 5% on Q4 results, maiden 1:1 bonus; JM Financial sees 20% surge

(22-May-26   13:15)

Life Insurance Corporation of India (LIC) shares jumped nearly 5% in a single day after the company announced its financial results'including a 1:1 bonus share issue, a dividend of Rs 10, and strong Q4FY26 earnings'prompting brokerages to forecast a rise in the stock price. JM Financial maintained a 'Buy' rating and raised its target price to Rs 960, indicating a potential upside of nearly 20%.

LIC's stock on Thursday is in focus after the company posted a 23% year-on-year rise in consolidated net profit in Q4FY26. Profit stood at Rs 23,467 crore compared to Rs 19,039 crore in the same quarter last year. The insurer's net premium income, meanwhile, rose 12% YoY to Rs 1.65 lakh crore for the quarter under review against Rs 1.48 lakh crore a year earlier.

LIC announced a 1:1 bonus issue, under which shareholders will receive one fully paid-up equity share of Rs 10 each for every one existing fully paid-up equity share held. The company has fixed May 29 as the record date for determining shareholder eligibility for the bonus issue.

In addition to this, LIC also declared a final dividend of Rs 10 per share for FY26, with June 25 fixed as the record date for dividend eligibility.

Following the results, the brokerage house JM Financial maintained a 'Buy' rating on LIC shares and raised its target price to Rs 960 apiece.

We had upgraded the stock after Q1FY26, expecting it to rerate with growth in 2H. A diversifying product mix with improving margins augurs well for LIC, providing resilience to growth. The stock has remained range-bound as weak markets ensured that EV remained below Sep'24 levels. As macro conditions improve, EV is expected to grow going forward, alongside an improving growth profile, with an unwind of 9%+ and VNB at 2% of opening EV, JM Financial said, while upgrading its earnings estimates for the state-run insurer.

According to the brokerage report, improving product mix, higher-ticket policies, and gradual expansion in non-participating products are supporting LIC's profitability profile.

JM Financial stated, 'With a solid outlook, we raise our target price to Rs 960, valuing the corporation at 0.6x Mar'28 Embedded Value Per Share.'

The brokerage further highlighted that total Annualised Premium Equivalent growth came in at 22% during the quarter.

Citi has issued a 'Buy' recommendation for LIC shares, setting a target price of ₹1,475 per share. This indicates a potential upside of over 84% from the previous closing price of ₹800 on the NSE.

The global brokerage said, the insurer reported strong operational performance in Q4, driven by a 690 bps year-on-year expansion in VNB margin, beating estimates. The improvement was aided by a higher non-par mix and favourable yield curve benefits in the rapidly growing non-par book. It added that the management highlighted efforts to sustainably improve persistency, drive product innovation, enhance productivity of existing agents, expand the agent base and increase business through non-agency channels.

Citi stated that the valuation remains attractive, as the projected value for the 2027 fiscal year'based on core EV operations (excluding MTM EV assets)'exceeds the current market valuation. However, it also noted that while operational performance is strong, the lack of clarity regarding the promoter shareholding structure remains a key hurdle.

As per the report, the insurer's Value of New Business margin stood at 21.2% for FY26, implying a 24.9% margin during the March quarter, and delivered 13% growth in individual Annualised Premium Equivalent and 27% growth in group business during FY26.

According to the report, the company's Value of New Business margin expanded by 360 basis points year-on-year during FY26.

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