As India’s financial sector navigates through the first half of FY26, the share performance of major insurance and lending companies is drawing investor attention. Here’s a clear, concise breakdown of the key developments:
1. LIC (Life Insurance Corporation of India): Strong Q1 Performance but Market Volatility Persists
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LIC reported a 5% year-on-year increase in net profit for Q1 FY26, driven by higher premium collections and a better product mix. The result pushed the stock up by nearly 4.7%.
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One notable shift is in LIC’s non-participating policy mix, which rose from 23.9% to 30.3%, leading to improved profit margins. Its solvency ratio also improved from 1.99 to 2.17 — a sign of financial strength.
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However, due to a broader market downturn, LIC’s investment portfolio took a hit, declining by over ₹66,000 crore in July due to a sell-off in blue-chip stocks like Reliance, TCS, and Axis Bank.
2. Insurance Sector: Premium Growth & Structural Developments
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According to industry data, life insurers collectively reported ₹38,958 crore in premium income in July 2025, marking a 22.4% increase from the same month last year. Both LIC and private insurers contributed to this growth.
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Meanwhile, Axis Max Life indicated that the merger with Max Financial Services is expected to proceed smoothly, contingent on the insurance reforms bill being passed in Parliament. This merger signals deeper consolidation in the sector and a push toward more efficient capital structures.
3. Loan Sector: SBI Results and NBFC Rally
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State Bank of India (SBI) beat market expectations with a 12% rise in Q1 net profit, supported by gains in its treasury operations and strong retail loan growth.
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Non-Banking Financial Companies (NBFCs) also witnessed a rally after the RBI relaxed rules for small loans and increased the loan-to-value (LTV) ratio for gold loans. Companies like Muthoot Finance, IIFL Finance, and Manappuram Finance saw their shares rise between 2% and 7%.
Conclusion: A Mixed Yet Promising Outlook
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LIC’s solid Q1 performance reinforces its stability, but equity market volatility remains a risk.
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The insurance sector is showing strong momentum with rising premiums and consolidation trends, especially with mergers like Axis Max Life & Max Financial on the horizon.
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The loan sector is benefiting from RBI’s accommodative policies, giving a much-needed boost to NBFCs and improving investor confidence.
As we move into the second half of FY26, the focus will remain on regulatory shifts, upcoming merger activity, and the global market environment — all of which will determine the next moves for India’s financial giants.