LIC falls 4% as Q2 VNB misses despite 20% profit rise

LICI ration of India (LICI) fell 4% to ₹391.65 on the NSE on November 6, even though its Q2 FY27 net profit rose 20.1% year-on-year to ₹12,076 crore. The results came out on November 5, and the value of new business (VNB) missed estimates. Net premium income grew 16.2% to ₹1.47 lakh crore. Q2 VNB rose 17.1% to ₹3,710 crore, and the VNB margin improved to 21.8% from 19.3% a year ago. For the first half, VNB jumped 34% to ₹6,846 crore, with the margin expanding to 22.3% from 17.6%. The profitability trend is improving. LIC is selling more high-margin products, and management expects margins could improve further in the second half as ticket sizes rise. The new business picture is weak. Annualised premium equivalent (APE), a key measure of new sales, grew just 3.8% to ₹17,004 crore. First-year premium fell to ₹10,432 crore from ₹10,836 crore. Most of the premium growth came from renewals of old policies, not fresh sales. The Q2 VNB margin also slipped 109 basis points from Q1, and the strong first-half numbers flatter the weaker second quarter. Investors should watch APE growth, first-year premium trends, VNB margins in H2, and market share against private insurers. The key question is whether LIC can grow new business, not just margins on a slowing sales base. Disclosure: I do not hold any position in Life Insurance Corporation of India. This post is for informational purposes only and is not investment advice.