Shares of Life Insurance Corporation of India (LIC) experienced a significant surge on Wednesday, May 28, 2025, jumping 8.8% to an intraday high of Rs 948 on the BSE. This rally followed the company's announcement of a robust financial performance for the fourth quarter of FY25, highlighted by a 38% year-on-year (YoY) increase in net profit to Rs 19,039 crore. The state-owned insurer also declared a final dividend of Rs 12 per share for FY25.

In Q4 FY25, LIC's net profit not only grew 38% YoY but also saw a substantial 73% sequential jump from Rs 11,009 crore reported in the December quarter (Q3 FY25). However, the net premium income for the quarter ending March 2025 saw a slight decline of 3.2% YoY, amounting to Rs 1,47,917 crore compared to Rs 1,52,767 crore in the corresponding quarter of the previous year. Sequentially, the net premium income rose by 38% from Rs 1,07,302 crore in Q3 FY25.

For the full financial year ended March 31, 2025 (FY25), LIC reported an 18% increase in consolidated profit after tax, which stood at Rs 48,151 crore. The insurer's total premium income for FY25 rose to Rs 4,88,148 crore from Rs 4,75,070 crore in FY24. The individual business premium contributed Rs 3,19,036 crore, while the group business premium saw a slight decline, amounting to Rs 1,69,112 crore.

Operationally, LIC sold 1.77 crore policies in the individual segment during FY25, a decrease from the 2.03 crore policies sold in the previous fiscal year. Despite this, the company demonstrated financial strength with its assets under management (AUM) increasing by 6.45% to Rs 54,52,297 crore. Furthermore, LIC’s solvency ratio improved to 2.11 from 1.98 a year earlier, indicating enhanced capital strength.

On an Annualized Premium Equivalent (APE) basis, LIC's total premium for FY25 was Rs 56,828 crore. The individual business accounted for 67.25% of this APE. Within the individual APE, participating (Par) products constituted 72.31%, while non-participating (Non-Par) products made up the remaining 27.69%. Notably, the Non-Par APE segment showed strong growth, increasing by 50.28% YoY to Rs 10,581 crore in FY25.

The Value of New Business (VNB) for FY25 reached Rs 10,011 crore, marking the first time it crossed the Rs 10,000 crore threshold. The VNB margin also showed steady improvement, reaching 17.6% as of March 31, 2025.

Siddhartha Mohanty, CEO & MD of LIC, described FY25 as both "exciting and challenging." He mentioned that the company had to redesign and relaunch products to comply with regulatory changes after a strong performance in the first six months. Mohanty highlighted key achievements for the year: an Individual New Business Premium of Rs 62,495 crore, the milestone Net VNB of Rs 10,011 crore, a rising VNB margin at 17.6%, an increased Non-Par APE share within the individual business to 27.69%, and a declared bonus of Rs 56,190.24 crore to policyholders.

Following LIC's strong Q4 results, several brokerage firms expressed bullish views on the stock, highlighting improving margins, APE recovery prospects, and strong support from equity markets as key positives for future growth.

Motilal Oswal: Maintained a ‘Buy’ rating on LIC with a target price of Rs 1,050. The brokerage cited improving profitability metrics and year-on-year expansion in VNB margin, despite a continued decline in Annual Premium Equivalent (APE). They noted that the increasing contribution from non-par business segments is aiding VNB margin improvement, though they revised VNB margin estimates downward by 50 basis points each for FY26 and FY27 based on FY25 performance.

Antique: Reiterated a ‘Buy’ rating and raised its target price for LIC to Rs 990 from Rs 940. Antique observed that while APE remained flat, VNB rose by 4.5% despite regulatory headwinds from revised surrender value norms. Management expects APE growth to recover gradually in FY26. Factoring in the better-than-expected Q4, Antique raised its FY26–27E VNB estimates by about 6% and projects a 5–9% CAGR for VNB/EV with a 10% return on equity (ROE).

Kotak Institutional Equities: Maintained a ‘Buy’ rating and increased its target price to Rs 1,260 from Rs 1,175. Kotak acknowledged that a shift in the par business and pressure on non-par margins could lead to sluggish medium-term VNB growth. However, they highlighted that the recent rally in equity markets will boost investment variance. LIC’s embedded value (EV) has reflected realized returns of about 10% during FY2022–25, including 25% in FY2024 and 6% in FY2025. Kotak has built in a 9% CAGR for FY2025–28E for EV.

Prior to the announcement, shares of LIC had closed 0.1% higher at Rs 871.05 on the BSE on Tuesday, May 27, 2025.