LIC Stock Surges Over 4% After Strong Q2 Results, Brokerages Issue 'Buy' Calls

Life Insurance Corporation of India (LIC) experienced a significant stock price increase of over 4 percent on November 7, reaching Rs 933.10 per share. This surge was triggered by the company's better-than-expected second-quarter financial results for FY26, announced after market hours on November 6, and subsequent positive calls from financial analysts.

LIC reported a standalone net profit of Rs 10,053.39 crore for the second quarter of FY26, marking a substantial 32 percent year-on-year increase from Rs 7,620.86 crore in the same period last year. The firm's net premium income also saw a healthy 5.5 percent year-on-year growth, reaching Rs 1.26 lakh crore. Key financial health indicators improved, with the solvency ratio climbing to 2.13 percent from 1.98 percent in Q2 FY25, and asset quality for policyholders' funds showing enhancement. Furthermore, LIC's Assets Under Management (AUM) expanded by 3.31 percent to Rs 57.23 lakh crore.

Following these results, several brokerage firms issued optimistic reports. JM Financial maintained its 'Buy' rating with a target price of Rs 1,111, forecasting a strong recovery in growth driven by potential GST 2.0 tailwinds. Motilal Oswal Financial Services also kept a 'Buy' call, setting a target of Rs 1,080, and increased its VNB margin estimates, expecting premium growth recovery in H2 FY26. HDFC Securities raised its earnings estimates and maintained an 'Add' rating with a target of Rs 1,065, highlighting APE growth led by group business and improved VNB margins. Bernstein assigned a 'Market-Perform' rating with a target of Rs 1,070, expecting cost controls to offset any minimal GST impact. Emkay reiterated an 'Add' rating with a Rs 1,100 target, having raised estimates for APE and VNB margins.

Impact: This news is highly positive for LIC and the Indian insurance sector. The strong earnings report and multiple brokerage upgrades are expected to boost investor confidence and potentially drive further positive movement in LIC's stock price, contributing to overall market sentiment in the financial services segment. Impact Rating: 8/10

Difficult Terms: * **Standalone net profit**: The profit a company makes from its core business operations, excluding profits or losses from subsidiaries or joint ventures. * **Year-on-year (YoY)**: A comparison of financial data from one period to the same period in the previous year (e.g., Q2 FY26 compared to Q2 FY25). * **Net premium income**: The revenue earned by an insurance company from premiums paid by policyholders, after deducting reinsurance costs. * **Solvency ratio**: A measure of an insurer's ability to meet its long-term financial obligations to policyholders. A higher ratio indicates greater financial strength. * **Asset quality for policyholders' funds**: Refers to the health and performance of the investments made by the insurance company on behalf of its policyholders. * **AUM (Assets Under Management)**: The total market value of all the financial assets that a financial institution manages on behalf of its clients. * **APE (Annualised Premium Equivalent)**: A standard industry measure of the size of an insurance company's life insurance business, reflecting both single premiums and annualized new recurring premiums. * **GST**: Goods and Services Tax, a consumption tax imposed on the sale of most goods and services. "GST 2.0" likely refers to proposed or upcoming changes to the GST system. * **VNB (Value of New Business)**: The present value of future profits expected from new insurance policies sold in a given period. It is a key profitability metric for life insurers. * **Non-par policies**: Insurance policies where policyholders do not share in the insurer's profits; they are simpler products compared to participating (par) policies. * **Agency channel**: The network of insurance agents who sell policies on behalf of the insurance company. * **Surrender guidelines**: Regulations or rules governing the process and terms under which a policyholder can cancel an insurance policy and receive a refund. * **P/E ratio (Price-to-Earnings ratio)**: A valuation metric that relates a company's stock price to its earnings per share. It indicates how much investors are willing to pay for each dollar of earnings.