LIC’s shares closed flat at ₹823.45 on the BSE on Thursday, before a Friday earnings preview from analysts. The stock has swung 3.2% this week, trailing the Nifty 50’s 1.8% gain. And the move stems from two things: an unresolved ₹6,146-crore tax demand and whispers about higher-than-expected policy surrenders in the March quarter.
That tax demand—first reported in February 2026—stems from a Mumbai bench of the Income Tax Appellate Tribunal (ITAT). In its 2023 order, the tribunal set aside LIC’s claim of ₹3,187 crore of tax credits for FY2020-21, leaving the insurer with a net liability of ₹6,146 crore including interest and penalties. “The tax department hasn’t enforced the demand yet,” said Mumbai-based analyst Ravi Shah. “But the contingent liability is enough to keep auditors, media, and market watchers awake.”
The March quarter—the fourth for FY26—always draws focus because it carries bulk of the year’s policyholders’ maturity payouts. In FY25, LIC paid out ₹2.12 lakh crore in maturity claims across 42.7 million policies, per IRDAI’s annual report published July 2025. Shailesh Mistry, head of equity research at ICICI Securities, expects Q4 FY26 payouts to hit ₹2.3 lakh crore—a 9% jump—largely driven by endowment and money-back policies sold in 2002-2005.
Investors will eye two numbers: the surrender ratio and the persistency ratio. In Q3 FY26, LIC’s surrender ratio crept up to 11.2%, versus 10.8% in Q3 FY25. “Early policy redemptions hit cash flow,” said Namita Bose, portfolio strategist at Axis Securities. “But with interest rates plateauing, we may see some stabilization in Q4.”
LIC’s life fund grew 7.8% to ₹49.2 lakh crore in December 2025—still the largest in India. And yet, its embedded value per share slipped 1% year-on-year to ₹698, per IRDAI disclosures. Analysts blame cost pressures, including rising administrative expenses (+6.3% y-o-y) and higher reinsurance costs driven by floods in Tamil Nadu and Kerala last July.
Thursday’s pre-results note from Motilal Oswal flagged another risk: reinsurance reinsurance terms for India-bound policies. “IRDAI’s 2025 circular capped reinsurance recoveries at 95% of catastrophe claims,” said the brokerage. That means LIC must hold more capital behind cyclone-prone geographies, squeezing margins.
The March quarter also marks the first full quarter after LIC’s ₹1,500-crore buy-back in November 2025. The buy-back, approved by the Board on October 15, 2025, mopped up 18.2 million shares at ₹822 apiece. The move cut free float to 3.5%, tightening liquidity—and price discovery.
Ahead of the results, expected on April 25, analysts will dissect three items:
1. Net profit for Q4 FY26—Bloomberg consensus puts it at ₹13,200 crore, up 12% y-o-y.
2. Persistency ratio (13-month) beyond 68%—LIC has missed this thrice since FY23.
3. Surrender ratio in the final month of March 2026.
“March is the key,” said Mumbai-based analyst Shailesh Mistry. “If payouts surge above ₹2.4 lakh crore, cash buffers could dip below 11 months of claims—something we haven’t seen since FY20.”
LIC’s market cap remains ₹5.12 lakh crore, making it the 11th largest listed firm in India. And with the Centre’s 6-monthly disinvestment pipeline including LIC’s next tranche—rumored at 2%-3%—every rupee of profit clarity matters.
Recent guidance from LIC’s managing director, Siddhartha Mohanty—speaking at an earnings call in October 2025—placed FY26-27 premium growth at 8%-10%. “We are committed to value creation,” he told reporters. “The tax claim is a legacy issue; we will resolve it.” But resolute words haven’t halted volatility.
Investors betting on a relief rally could see the stock touch ₹870 if Q4 profit beats ₹14,000 crore. Downside risk looms at ₹790 if surrender-linked cash drains squeeze liquidity further.
And after Thursday’s closing bell, Reliance Securities upped its target price to ₹910—citing improving mortality margins and cost efficiencies. The upgrade came just hours before the exchange alerted brokers to a potential volatility spike Friday morning.
> **LIC, India’s largest insurer, will unveil its March quarter results on April 25, days after a tax cloud lifted ₹6,146 crore and policy surrenders crept up to 11.2%.** The announcement could reroute flows in the broader market, especially in banking and financial services.
