Highest Upside

Research report date Feb 21, 2024(RC-1041) and Research Reports dated Nov 21, 2024 (RC- 882) In 2024, it touched an all-time high of Rs 1,222 on Aug 01, 2024. LIC has proposed a dividend of Rs 12/- for FY25. Keeping in mind the dominant position in the life insurance industry and...

,Research Reports dated Nov 21, 2024 (RC- 882) and Research Report dated June 02,2025 (RC953) LIC has proposed a dividend of Rs 12/- for FY25. Keeping in mind the dominant position in the life insurance industry and attractive...

Distribution Diversified, Growth Amplified

Strategic Shift Underpins Long-Term Compounding Story

ICICI Prudential Life Insurance (IPRU) reported a decline of 5% YoY in new business APE to INR18.6b (in-line) in 1QFY26, largely impacted by the base effect and a slowdown in ULIP momentum due to market volatility.

LIC witnessed APE/VNB grow 3.6%/12.3% YoY in H1FY26. Strategic initiatives have tracked well consistently. LIC has been able to push product mix towards non-participating (36% of individual APE in H1FY26 vs. 9%/18%/28% in FY23/FY24/FY25); and continuously revise its pricing/product strategy to maximise shareholder value.

LIC saw APE/VNB grow 9.4%/20.7% YoY in Q1FY26. Strategic initiatives have tracked well consistently in terms of pushing product mix towards non-participating (30% of individual APE in Q1FY26 vs. 9%/18%/28% in FY23/FY24/FY25) and revision in pricing/product strategy should maximise value for all stakeholders with changes such as hike in surrender value, re-designing of products, higher ticket sizes.

APE and VNB growth slows, expected to normalise going ahead

LIC's financial results were healthy, buoyed by strong VNB and AUM, and further supported by robust policy sales (selling 588,107 policies in 24 hours on January 20, 2025, a Guinness World Record). The non-par business has grown significantly, with a 50.3% YoY increase in non-par APE, and now accounts for 27.7% of individual APE. Additionally, the company has been working on improving persistency through decisions such as increasing ticket size, and changing premium and commission...

ICICI Prudential (IPRU) reported a volume decline of 5% YoY in total APE vs 10.2% YoY growth for private industry in Q1FY26. While volume growth was weak in Q1FY26 (retail APE down 9.2% YoY), margin performance was better (VNB margin improved to 24.5% in Q1FY26 from 22.8% in FY25) driven primarily by product mix change and cost optimisation.

In 2QFY26, LIC reported net premium income of INR1.3t (in line), which grew 5% YoY. Renewal premium grew 5% YoY to INR650b and single premium grew 8% YoY to INR508b.

In 1QFY26, LIC reported net premium income of INR1.2t (in line), up 5% YoY. Renewal premium grew 6% YoY to INR599b, while first-year/single premium grew 1%/4% YoY to INR75b/INR519b.

HDFC Life Insurance (HDFCLIFE) reported an APE of INR41.9b (in line) in 2QFY26, up 9% YoY. This was led by a 9%/7% YoY growth in individual/group APE. For 1HFY26, APE grew 10% YoY to INR74.1b.

HDFC Life Insurance (HDFCLIFE) reported APE of INR32.3b (in-line) in 1QFY26, up 13% YoY, driven by 13%/12% YoY growth in individual/group APE.

ICICI Prudential (IPRU) saw APE/VNB decline/grow 3.3%/1% in Q2 and dip 4.1%/0.9% in H2FY26. Strong cost execution and product mix lifted margins to 24.5% (up 104bps YoY) in Q2. VNB slipped 0.9% YoY in H1FY26 but increased 1% YoY in Q2FY26.

ICICI Prudential Life Insurance (IPRU) reported APE of INR24.2b (in-line), reflecting a decline of 3% YoY. In 1HFY26, APE declined 4% YoY to INR42.9b.

LIC saw VNB/EV grow 4.5%/6.8% YoY in FY25. Strategic initiatives have tracked well consistently in terms of pushing product mix towards non-participating (28% of individual APE in FY25 vs. 18%/9% in FY24/FY23) and revision in pricing/product strategy to maximise value for all stakeholders with changes like hike in surrender value.

We reiterate our “BUY” rating on the stock, as we expect strong premium growth,
stable margins, and a resilient product mix to underpin sustainable profitability and market share gains in FY26E.

We value IPRU at 1.5x Mar’27 EVPS, implying a target price of INR 714. IPRU is
currently trading at 62.6x FY26 P/E, lower than the peer average of 68.6x FY26 P/E, led by lower growth in net profitability. We upgrade our rating from “HOLD” to “ACCUMULATE” on the stock.

In H1FY26, VNB rose 14% YoY to Rs. 2,750cr, with VNB margin at 27.8% (vs 26.8% in H1FY25), led by steady protection growth, favourable product mix and stronger 13th-month persistency at 87.1% vs 86.4%, reflecting improved policy...