LIC Q3 Review: Yes Securities Maintains 'Buy' On The Stock, Revises Target Price, Sees 23% Upside — Here's Why

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Yes Securities Report

VNB margin - Calculated value of new business margin improved on sequential basis as Life Insurance Corporation of India redesigns products, adjusts commission and continues to enhance product mix:

The VNB margin for Q3 FY25 was 19.4%, down -65bps YoY but up 149 bps QoQ. The VNB margin for 9M FY25 was 17.1% compared with 16.6% in 9M FY24, up 50bps YoY. Change of product design and change in product mix were the key factors that led to the 50 bps expansion in VNB margin on YoY basis.

Mix of business has been an important factor with rising share of Non-Par business having a positive impact. The decline in risk free rate has had a negative impact of 210 bps on margin, whereas product mix has had a positive 240 bps impact. With regard to product design, there has been a revision of premium rates on some products but not where the company already had a good margin.

Apart from changes to product design, commission rates have also been realigned

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