Life Insurance Q2 FY27 Results (NSE: LICI)
Signal: Earnings grew
The read
The trajectory remains positive on a YoY basis: total income grew 9.7% to ₹262739.27 crore, net premium income accelerated 16.2% to ₹147018.18 crore, and PAT grew 20.1% to ₹12076.02 crore as the Expenses of Management ratio improved 180bps to 10.23%; however, PAT fell 10.5% QoQ and H1 operating cash flow turned negative at ₹16281.86 crore.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,62,739.27 Cr | +9.7% | +10.5% |
| Net profit | ₹12,076.02 Cr | +20.1% | |
| EPS | ₹9.55 | +20.1% | |
| EBIT margin | 0% |
P&L walk
Standalone total income was ₹262739.27 crore, +9.7% YoY and +10.5% QoQ, led by higher net premium income; management expenses fell 1.1% YoY, PAT rose 20.1% YoY to ₹12076.02 crore, but declined 10.5% QoQ.
Key positives
- Net premium income reached ₹147018.18 crore, up 16.2% YoY and 15.6% QoQ, growing faster than total income at 9.7% YoY.
- PAT increased 20.1% YoY to ₹12076.02 crore, while the Expenses of Management ratio improved to 10.23% from 12.03% YoY.
- Solvency remained strong at 2.35x versus the regulatory requirement of 1.50x, despite declining 0.07x QoQ.
- Policyholder gross NPA ratio improved to 1.16% from 1.34% YoY and 1.21% QoQ.
Key concerns
- PAT declined 10.5% QoQ from ₹13492.03 crore to ₹12076.02 crore despite total income rising 10.5% QoQ.
- H1 operating cash flow was negative at ₹16281.86 crore versus positive cash flow of ₹13559.61 crore in H1 FY26, despite H1 PAT of ₹25568.05 crore.
- 13th-month persistency fell to 67.67% from 70.38% QoQ, while 25th-month persistency fell to 63.01% from 65.95% QoQ.
- Other operating expenses increased 62.6% YoY to ₹3172.79 crore even as employee costs declined 22.3% YoY to ₹5832.94 crore.
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