LIC share price falls after Q3 results as brokerages downgrade stock, cut target price; Should you buy or sell?

Life Insurance Corporation of India (LIC) share price traded lower amid volatility on Monday after the company reported its Q3 results. LIC shares fell nearly one percent to ₹808.20 apiece on the BSE. However, LIC stock price also made an intraday high of ₹824.80 apiece, gaining 1.08% from previous closing price.

The state-run largest insurer, Life Insurance Corporation of India (LIC) reported a consolidated net profit of ₹11,009 crore in the third quarter of FY25, registering a 16% growth from ₹9,469 crore in the year-ago period. On a sequential basis, net profit jumped 42% from ₹7,729 crore in the September quarter.

LIC’s net premium income in Q3FY25 fell 9% to ₹1,07,302 crore from ₹1,17,432 crore in the corresponding quarter of the last fiscal year. The net premium income declined 11% from ₹1,20,326 crore, quarter-on-quarter (QoQ).

The assets under management (AUM) of LIC increased by 10.29% to ₹54,77,651 crore as of December 31, 2024, as against ₹49,66,371 crore on December 31, 2023.

LIC’s weak Q3 results prompted certain brokerages to downgrade the stock and cut their target prices. Here’s what brokerages have to say on LIC shares:

Should you buy LIC shares?

According to JM Financial, LIC reported a weak quarter, with individual APE (Annual Premium Equivalent) contracting 27.2% YoY to ₹64.5 billion and group APE contracting 18.5% YoY to ₹35.0 billion. This is a disappointment even against the 13.4% YoY contraction in individual APE provisionally reported to IRDAI.

“LIC stock is inexpensive at 0.6x FY27e EVPS of ₹1,474, however, we expect a re-rating only once the corporation has found its way around the new product variants and we have some clarity on regulatory stance on multiple tie-ups of individual agents. As we roll forward to FY27e, we value the stock at 0.6x FY27e EV of ₹1,474, against 0.9x FY26e earlier,” JM Financial said.

The brokerage firm downgraded LIC shares to ‘Hold’ from ‘Buy’, and reduced the LIC stock price target to ₹860 from ₹1,300 earlier.

Motilal Oswal Financial Services (MOFSL) said that LIC maintained its industry-leading position and was focusing on ramping up its overall growth through wider product offerings, a shift in the product mix toward non-par, a stronger agency channel, and digitization.

“LIC has done an alignment of distributor incentives to absorb the impact of surrender charges. With the introduction of a new hedging mechanism, the company is confident of curbing the uncertainties around VNB and expects the product-level margins to remain intact. We have cut our net premium, APE and VNB margin estimates by 4% each for FY25, factoring in 3QFY25 performance. With the increase in the share of the non-par segment, we expect VNB margin to improve,” MOFSL said.

It reiterated a ‘Buy’ rating on LIC shares and cut the target price to ₹1,085 per share.

Factoring the lower growth, Antique Stock Broking reduced its FY25-27E VNB estimates by 8%-11%. Valuations at <0.6x FY26E adjusted P/EV remains attractive given its expectation of 7%-9% VNB/EV CAGR over FY24-27E, it said.

Antique Stock Broking maintained a ‘Buy’ call and reduced DCF-based LIC share price target to ₹1,080 from ₹1,260 earlier, implying 0.7x FY27E adjusted P/EV.

LIC Share Price Trend

LIC share price has fallen over 3% in one month and has dropped 10% year-to-date (YTD). In the past six months, LIC stock price has dipped more than 28%, while it has declined 25% in one year. However, LIC shares have delivered 30% returns in two years.

At 11:55 AM, LIC shares were trading 0.75% lower at ₹809.85 apiece on the BSE, commanding a market capitalisation of more than ₹5.12 lakh crore.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.