LIC Q2 preview: APE might drop as much as 10% YoY on excessive base, however margin stability gives consolation. 7 issues to trace
Worth of New Enterprise (VNB) is seen within the vary of Rs 2,374 crore and Rs 3,018 crore within the quarter below assessment. YES Securities stays most conservative in its estimates, suggesting a 19% YoY drop, whereas Centrum Broking sees it develop by 3% over the corresponding quarter of the final monetary yr.
VNB is a key efficiency metric, indicating anticipated future earnings from the brand new insurance coverage insurance policies and long-term development potential of the corporate’s new enterprise.
The general efficiency might mirror the affect of regulatory modifications, a excessive base, and evolving product combine — with a continued shift towards non-participating (non-par) and higher-margin merchandise.
The estimates by Kotak Institutional Equities and Emkay Analysis have additionally been taken under consideration.
Right here’s what brokerages forecast:
1. Annualised Premium Equal (APE)
Most brokerages count on LIC’s APE to say no barely on a yearly foundation attributable to muted momentum in new enterprise and a excessive base impact.– Kotak Equities estimates APE at Rs 16,380 crore, down 0.5% YoY however up 29% QoQ.
– Emkay Analysis expects 4.6% YoY fall to Rs 15,710 crore
– YES Securities initiatives Rs 14,840 crore, a sharper 10% YoY fall and up 17% QoQ.
– Centrum Broking: Rs 16,213 crore, down 1.5% YoY and up 28% QOQ
Kotak mentioned that LIC’s YoY decline in APE is just like the run-rate within the first two months of the quarter.
“We pencil in new enterprise development assumptions primarily based on developments noticed until August 2025, when LIC had displayed NBP/APE development of 21%/35% for 2M2QFY26 (July and August 2025) over 2M1QFY26 (April and Could 2025),” YES mentioned in a preview observe.
Emkay attributes robust development in retail APE within the September quarter of FY25 to YoY decline in Q2FY25. The bottom impact is into play owing to the channel-push previous to the implementation of the brand new give up laws, the brokerage famous.
2. Worth of New Enterprise (VNB)
– Kotak Equities: Rs 2,844 crore, down 3.3% YoY and up 46% QoQ
– YES Securities: Rs 2,374 crore, down 19% and up 22% QoQ
– Centrum Broking – Rs 3,018 crore, up 3% YoY and up 55% QoQ
– Emkay Analysis: Rs 2,821 crore, down 4.1% YoY
VNB efficiency is predicted to stay secure, aided by improved product combine and price administration.
3. VNB margin
– Kotak Equities forecasts a 17.4% margin, down 50 bps YoY and up 199 bps QoQ
– Centrum Broking: 18.6%, up 82 bps YoY and up 325 bps QoQ
– Emkay Analysis pegs it at 18%, up 10 bps YoY
– Sure Securities expects a QoQ enlargement of 63 bps, aided by combine enchancment.
4. New Enterprise Premium (NBP)
In response to Sure Securities, NBP is predicted to return in at Rs 58,677 crore, up 1% YoY however marginally decrease 1% QoQ, reflecting regular momentum after a strong begin to FY26.
5. Property Below Administration
Emkay Analysis initiatives LIC’s AUM at Rs 58.93 lakh crore, up 6.4% YoY, supported by secure inflows and constructive market actions in the course of the quarter.
6. Revenue After Tax (PAT)
Emkay is the one brokerage amongst its friends to have given internet revenue estimates at Rs 8,198 crore, up 7.6% YoY, with continued advantages from regular operational efficiency.
7. Key monitorables
Traders ought to hold a monitor of LIC’s commentary on non-par product enlargement and enterprise combine shift, affect of GST ITC disallowance on margins and profitability and development in group and retail APE segments.
Traits in embedded worth (EV) and administration steering for H2FY26, additionally stay key attributes to be careful for.
(Disclaimer: The suggestions, options, views, and opinions given by the consultants are their very own. These don’t symbolize the views of The Financial Occasions.)
