LIC India: First Take: Mix-driven strong start to FY27; maintain OW

研报英文原文证据摘录

J P M O R G A N

Asia Pacific Equity Research

07 August 2026

LIC India

First Take: Mix-driven strong start to FY27; maintain

OW

Our First Take: LIC has been a FYTD underperformer (-8.9% vs. Nifty Index: 5.7%), but has outperformed private insurers. LIC’s individual APE growth came in

at 6.7% YoY taking 1Q Indiv. APE to Rs 75.3bn. Total APE improved 8.2% YoY to

Rs136.9bn, aided by stronger group business which grew 10.2% YoY. For 1Q27 LIC

has reported VNB growth of 61.3% YoY (vs. JPMe 63% YoY, consensus 43% YoY)

at Rs 31.4bn (vs. JPMe at Rs 31.6bn, consensus at Rs 27.8bn) despite GST headwinds

as VNB margin improved 750bp YoY to 22.9% (vs. JPMe 21.2%, consensus 18.2%)

mainly due to improved mix. We expect top-line and VNB growth to normalize

gradually as the base increases in 2H27. We have built in a FY26-28E VNB CAGR

of 8.1%. LIC trades at just 0.5x FY28E P/EV (vs. private peers’ average: 1.5x). We

reiterate our OW on LIC, given strong valuation support.

Key Positives

LIC’s 1Q27 results represent a strong delivery across key metrics. Firstly, 1Q27 VNB

was at Rs 31.4bn (61.3% YoY), with product margin enhancement and mix

improvements driving the strong growth. Secondly, LIC retained the benefit of

increased yields thereby boosting its margins by 290bp YoY due to positive economic

assumption changes. Mix further aided margins by 650bp, while GST dragged

margins by 190bp. Overall, LIC reported a sharp 750bp YoY margin improvement to

22.9%. Thirdly, we welcome the company’s diversification in product (strong

improvement in 1Q27 NPAR share +480bp YoY to 12.9%). Lastly, the company

reported strong earnings, with 1Q27 PAT at Rs 134.9bn (22.8% YoY), supported by

broadly contained expenses (1Q27 expense ratio: 10.63%, +16bp).

Key Negatives/Question Marks

While the company has expressed optimism about the positive impact of the GST

changes, we note that its current product mix shift is largely skewed towards NPAR

(savings) policies. LIC’s strategy to improve protection sales remains unclear. In this

context, it will be important to understand LIC’s future plans to enhance its product

mix, particularly with regard to protection cover. Secondly, agency continues to

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