LIC's valuation a mirage?

Life Insurance Corp. of India (LIC) has outpaced private sector peers on a key metric. In Q4FY26, its annualized premium equivalent (APE)—calculated by adding regular premium and one-tenth of single premium—rose 22% to ₹22,954-crore. Axis Max Life Insurance was next at 18%.

- Manish Joshi

LIC's growth came despite its dominant 57% market share in India's life insurance sector. HDFC Life Insurance Co., ICICI Prudential Life Insurance Co. and SBI Life Insurance Co. struggled to post even double-digit growth. LIC's faster APE growth, akin to revenue growth for other firms, pushed the stock up 5% intraday on Friday. Some brokerages also raised earnings estimates, citing robust Q4 performance.

LIC's valuation conundrum is worth addressing, especially considering its disappointing stock performance over the past several years. Barring sporadic rallies, including a high of ₹1,222 in August 2024, the stock has largely stayed below its issue price of ₹949 even four years after listing. Most analysts tracking LIC remain broadly bullish, but the stock has failed to move up in a sustained way. Analysts attributed the lacklustre stock performance partly to a technical overhang, as the government must sell another 6.5% stake by May 2027 to cut its holding to 90%.