Motilal Oswal has reiterated its ‘Buy’ rating on LIC with a target price of ₹1,050, even as the insurer reported a weak operational performance in Q4FY25. The brokerage noted a continued decline in new business metrics, including a 9% YoY drop in new business premium and a 14% fall in VNB. Total APE also declined 3% YoY, while retail APE slid 9%.
Despite the drop in business volume, the VNB margin rose to 18.75%, up from 21.1% a year ago. Motilal Oswal highlighted that this expansion was largely driven by the growing share of non-par products in the overall mix. This strategic shift is expected to continue supporting margin resilience.
The management is optimistic about premium growth recovering in the near term, although a revival in the number of policies issued may take longer due to structural shifts. Citing the FY25 performance, Motilal Oswal has cut its VNB margin estimates by 50 basis points each for FY26 and FY27 but maintained its positive stance based on LIC’s evolving product strategy and long-term market leadership.
