LIC shares zoom 9% as Q4 PAT rises 38% YoY. Should you invest?
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Motilal Oswal: Buy | Target Price: Rs 1,050
Antique: Buy | Target Price: Rs 990
Kotak Institutional Equities: Buy | Target Price: Rs 1,260
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Shares of India's largest insurer, Life Insurance Corporation of India (LIC), surged 8.8% to an intraday high of Rs 948 on the BSE on Wednesday, after the company reported a 38% year-on-year (YoY) rise in net profit to Rs 19,039 crore for the fourth quarter of FY25.Additionally, LIC posted a 73% sequential jump in profit, up from Rs 11,009 crore in the December quarter. For the full financial year, the state-owned insurer recorded an 18% increase in profit and reported improvements across key financial metrics, including assets under management and the solvency ratio.The board of the state-run insurer also announced a final dividend of Rs 12 per share.LIC's net premium income for the quarter fell 3.2% YoY to Rs 1,47,917 crore, down from Rs 1,52,767 crore a year ago, but rose 38% sequentially from Rs 1,07,302 crore in Q3FY25.Following the company's Q4 results, here's what analysts from various brokerages had to say:Also read: ITC tumbles 4% on BAT's likely 2.6% stake sale worth Rs 15,000 crore Motilal Oswal has maintained a 'Buy' rating on LIC with a target price of Rs 1,050, citing improving profitability metrics. While the decline in Annual Premium Equivalent (APE) continues, the Value of New Business (VNB) margin has shown year-on-year expansion.However, the brokerage has revised its VNB margin estimates downward by 50 basis points each for FY26 and FY27, factoring in LIC's FY25 performance. It also highlighted that the increasing contribution from non-par (non-participating) business segments is aiding VNB margin improvement.Antique has reiterated a 'Buy' rating on LIC, raising its target price to Rs 990 from Rs 940 after LIC's steady FY25 financial performance.The brokerage noted that while APE remained flat, VNB rose 4.5% despite regulatory headwinds from revised surrender value norms. Management expects APE growth to recover gradually in FY26 as LIC adapts to compliant products and higher ticket sizes. Signs of recovery were already visible in March 2025, after a five-month decline triggered by regulatory changes post-October 2024.Factoring in the better-than-expected Q4, Antique has raised its FY26–27E VNB estimates by about 6% and projects a 5–9% CAGR for VNB/EV with a 10% return on equity (ROE).Kotak Equities has maintained a 'Buy' rating and raised its target price to Rs 1,260 from Rs 1,175.While a shift in the par business and pressure on non-par margins could lead to sluggish medium-term VNB growth, Kotak highlighted that the recent rally in equity markets will boost investment variance, which had seen large reversals in H2FY25.LIC's embedded value (EV) has reflected realized returns (unwinding and economic variance) of about 10% during FY2022–25, including a 25% return in FY2024 and 6% in FY2025. Kotak has built in a 9% CAGR for FY2025–28E.
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