Q2 FY27 results analysis · November 05, 2026
LICI Q2 FY27 Results Analysis: VNB Margin Expands 470 bps, PAT Jumps 20%
+20.1%PAT year on year, Rs. 12,076.02 Cr
Source: Quarterly results filing (BSE)
Quick summary
Life Insurance Corporation of India's Q2 FY27 numbers came in strong, with revenue of Rs. 147,018.18 Cr (+16.24% YoY) and PAT growth of +20.12% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details
| Results date | November 05, 2026 |
|---|---|
| Revenue (Q2) | Rs. 147,018.18 Cr (+16.24% YoY) |
| PAT (Q2) | Rs. 12,076.02 Cr (+20.12% YoY) |
Quarter Snapshot
LICI delivered 16.24% net premium growth and 20.12% PAT growth in Q2 FY27, with H1 Net VNB margin up 470 bps YoY to 22.3% and the EoM ratio improving to 10.23%, keeping the mid-20s VNB margin target for end-FY27 on track. Sequential persistency softening, decelerating APE growth, market-share erosion, and mark-to-market drag on the fair value account are the key watch-points.
Q2 FY27 Expectations vs Results
| Driver | Expected before results | What happened | Verdict |
|---|---|---|---|
| Revenue | "In-line to modestly ahead, with mix risk"; LIC lagging privates in NBP | Net premium +16.24% YoY (Q2), +11.64% H1; individual NBP +14.86% — ahead of the "in-line" base case — better | Played out |
| RFR/yield flips to headwind; debt MTM losses on rising G-sec yields | "a rising-yield quarter generates debt MTM losses" | Yield with unrealised gains 4.10% in Q2 (vs 15.04% Q1); debit fair-value account — MTM losses materialized, though core yield rose to 9.04% | Played out |
| Equity MTM / ULIP headwind; mix build stalls | "works against the equity MTM line and ULIP-linked fee income" | Non-par individual APE −5.98% YoY; policies −2.25%; IEV −1.95% — mix risk materialized | Played out |
| Expense ratio stays pressured (GST/ITC) | "compressing pressure, not relief" | EoM ratio improved to 10.23% (Q2) / 10.41% (H1), −87 bps YoY | Contradicted |
| Margin path mix-dependent, less assumption-dependent | Margin expansion continues but harder-won | VNB margin 22.3% H1 (+470 bps YoY), though below Q1's 22.9% discrete reading | Partially |
| Watch: VNB bridge decomposition | Requested in pre-call watch-list | Not disclosed in the filing — open for the earnings call | Not observable |
| Watch: banca vs "surpass last year" | Q1 was +5.25% | 7.53% share of individual NBP, +21.44% growth — surpassed | Played out |
| Watch: 13M persistency post ticket-size hike | "whether the promised improvement shows" | Policy-basis 13M 67.58% H1 vs 63.36% H1 FY26 improved YoY, but discrete Q2 67.67% is below Q1's 70.38% | Partially |
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Management Guidance vs Delivery
| What management said | Where | What happened | Verdict |
|---|---|---|---|
| Product/channel diversification strategy on track; non-par at ~one-third of individual APE | Press release (CEO) | Non-par share 34.03% H1 FY27 vs 36.31% H1 FY26 — still ≈ one-third, but absolute non-par APE fell 5.98% YoY (Rs.5,861 cr vs Rs.6,234 cr) — share level) / Contradicted (direction of non-par APE | Confirmed |
| VNB margin trend "always upward from Q1 to Q4" | Q2 FY26 earnings call (Appointed Actuary/management) | H1 margin 22.3% above FY26's 21.2% full-year figure | Confirmed |
| Group business momentum | Press release | Group premium +19.62% H1; group APE +13.55% (Rs.13,472 cr) | Confirmed |
| ULIP recovery upon market normalization | Prior earnings-call guidance | Not separately disclosed in this filing | Too Early |
Key Numbers, Quarter by Quarter
| Metric | FY26 (year) | H1 FY26 | Q1 FY27 | Q2 FY27 | H1 FY27 |
|---|---|---|---|---|---|
| Net VNB margin % | 21.2 | 17.6 | 22.9 | n/d | 22.3 |
| Solvency ratio | 2.35 | 2.13 | 2.42 | 2.35 | 2.35 |
| EoM ratio % | 11.91 | 11.28 | 10.63 | 10.23 | 10.41 |
| Yield (PH fund, w/o unrealised) % | 8.92 | 8.90 (H1) | 8.28 | 9.04 | 8.67 |
| Gross NPA % (PH fund) | 1.21 | 1.34 | 1.21 | 1.16 | 1.16 |
Key Investment Insights
Key Positives
- Net premium income grew 16.24% YoY to Rs.147,018.18 cr in Q2, with single premium up 34.6% to Rs.68,402.86 cr
- Standalone PAT grew 20.12% YoY to Rs.12,076.02 cr; H1 PAT up 21.52% to Rs.25,568.05 cr
- Net VNB margin expanded 470 bps YoY to 22.3% in H1 FY27; Net VNB grew 33.95% to Rs.6,846 cr
- Expenses of management fell 1.13% YoY against 16.24% premium growth; EoM ratio improved to 10.23% (Q2) from 12.03% (Q2 FY26)
- Group premium grew 19.62% YoY to Rs.1,13,594 cr; group APE +13.55%
- Gross NPA ratio on policyholders' fund improved to 1.16% from 1.34% a year ago; solvency ratio 2.35 vs 2.13 YoY
- Banca/alternate channel individual NBP grew 21.44%, share at 7.53% vs 7.12%
- Individual protection APE grew 58.59% YoY to Rs.157 cr
Risk Factors
- 13-month policy-basis persistency slipped to 67.67% from 70.38% in Q1 FY27; 61-month fell to 55.50% from 61.27%
- Total APE growth decelerated to 5.72% from 8.22% in Q1; non-par individual APE fell 5.98% YoY
- FYPI market share eroded to 58.77% from 59.41% H1 FY26
- Mark-to-market drag: yield on policyholders' funds with unrealised gains fell to 4.10% in Q2 vs 15.04% in Q1; fair value account swung to a Rs.524,926.09 cr debit
- Indian Embedded Value declined 1.95% YoY to Rs.7,97,378 cr; individual policies sold fell 2.25%
- Pension Non-Participating segment surplus fell 29.4% YoY despite net premium rising to Rs.31,517.58 cr
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