ICICI Securities's Bold Move: LIC Gets a BUY Tag! Target Price Revealed! Will LIC Hit ₹1,100?

ICICI Securities has reiterated its 'BUY' rating on Life Insurance Corporation of India (LIC) with an unchanged price target of INR 1,100. The brokerage firm's analysis indicates that LIC has successfully executed strategic initiatives, leading to a notable year-on-year growth of 3.6% in Annual Premium Equivalent (APE) and 12.3% in Value of New Business (VNB) for the first half of FY26.

A key highlight is LIC's strategic shift in its product portfolio. The proportion of non-participating products in individual APE has increased significantly, reaching 36% in H1FY26, up from 9% in FY23, 18% in FY24, and 28% in FY25. This focus on products with potentially higher margins helps maximize shareholder value.

The report also points to expansion in non-agency distribution channels, which now constitute 7.2% of individual Net Premium Income (NBP) in H1FY26, up from 3.9% in FY24 and 5.6% in FY25. Simultaneously, LIC continues to focus on its agency force, with the total number of agents growing by 3.2% year-on-year to 1.49 million as of September 2025. Digital initiatives like DIVE and Jeevan Samarth are also showing improvement.

ICICI Securities believes that LIC can achieve an increase in VNB margin, driven by its evolving product mix, a fact already demonstrated by the company. However, sustained double-digit VNB growth will depend on overall volume growth. The target price of INR 1,100 is based on 0.75 times the estimated FY27 Embedded Value (EV) of INR 9.3 trillion. The brokerage acknowledges that this multiple accounts for the inherent risk of EV sensitivity to market movements and LIC's comparatively lower core Return on Embedded Value (RoEV) against peers, given its large existing base.

Impact: This news is positive for Life Insurance Corporation of India's stock. The reiterated 'BUY' rating and unchanged target price suggest continued confidence from analysts, which could support investor sentiment and potentially influence the stock price positively. The strategic shifts noted in the report indicate potential for improved profitability and growth. Rating: 7/10

Difficult Terms: APE (Annual Premium Equivalent): This is a measure used in the insurance industry that represents the annualized value of single premiums and the first year's premiums from regular premium policies. It's a key indicator of sales performance for insurers. VNB (Value of New Business): This is the present value of future profits expected from a new insurance policy sold. It reflects the profitability of new business written. Non-participating products: These are insurance products where policyholders do not share in the profits of the insurance company. They typically offer guaranteed benefits. NBP (Net Premium Income): This is the total premium collected by an insurer from policyholders after deducting reinsurance premiums. EV (Embedded Value): This is the sum of a life insurer's net worth of its existing business (adjusted for market values) and the present value of future profits from new business. It's a measure of the company's intrinsic value. RoEV (Return on Embedded Value): This is a profitability metric for insurance companies, showing how effectively they are generating returns on their embedded value.