LIC shares climb 4% after Q3 results. Should you buy, sell, or hold?

Shares of state-run Life Insurance Corporation of India (LIC) jumped 4% to Rs 874.95 in Friday’s session, supported by a 17% rise in Q3FY26 profit and a favourable brokerage note from Bernstein, which maintained a Market-Perform rating and set a target price of Rs 940.

The insurer reported a 17% year-on-year (YoY) rise in consolidated net profit at Rs 12,930 crore for the December quarter, compared with Rs 11,008 crore in the year-ago period.

Net premium income stood at Rs 1.26 lakh crore in Q3FY26, up 17% from Rs 1.07 lakh crore in the corresponding period last year. On a sequential basis, profit after tax rose 28% from Rs 10,098 crore reported in Q2FY26, even as net premium income declined marginally by 0.7% quarter-on-quarter.

During the nine months ended December 31, 2025, LIC sold 1,16,63,856 policies in the individual segment, slightly lower than 1,17,10,505 policies sold in the same period last fiscal year, reflecting a decline of 0.40%.

On an Annualised Premium Equivalent (APE) basis, total premium for 9MFY26 stood at Rs 44,007 crore. Of this, Individual Business contributed 62.61% or Rs 27,552 crore, while Group Business accounted for 37.39% or Rs 16,455 crore.

Within Individual Business, Par products made up 63.54% of APE at Rs 17,507 crore, while Non-Par products accounted for 36.46% or Rs 10,045 crore. Individual Non-Par APE increased to Rs 10,045 crore for the nine months ended December 31, 2025, compared with Rs 6,813 crore in the year-ago period, registering a growth of 47.44%.The Value of New Business (VNB) for the nine-month period rose to Rs 8,288 crore from Rs 6,477 crore a year earlier, marking a growth of 27.96%. Net VNB margin expanded by 170 basis points to 18.8%, compared with 17.1% in the year-ago period.LIC’s solvency ratio improved to 2.19 as on December 31, 2025, from 2.02 a year earlier. Assets under management (AUM) increased to Rs 59,16,680 crore as of December 31, 2025, compared with Rs 54,77,651 crore on December 31, 2024, reflecting a rise of 8.01% YoY.

The overall expense ratio for the nine months ended December 31, 2025 declined by 132 basis points to 11.65%, compared with 12.97% in the corresponding period last year.

Brokerage viewBernstein maintained a neutral stance on LIC, assigning a Market-Perform rating with a target price of Rs 940.

The brokerage said LIC delivered a strong topline performance in Q3FY26 despite ongoing GST-related pressures, while margins improved on the back of a healthier business mix and favourable yield curve movements.

It noted that new business margins rose to around 21%, aided by a better product mix and yield gains, with the GST impact largely offset through tight cost discipline.

On the strategic front, management indicated that the process for the government’s stake sale is likely to commence soon. Bernstein also expects greater clarity on LIC’s dividend policy following the transition to IFRS accounting standards, a key monitorable for investors.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)