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Quick Pointers

* Growth momentum sustains driven by protection; ULIP resilient

* VNB margin improves as drag from loss of ITC eases

* FY27 outlook will be a key monitorable

Private life insurers reported healthy growth in Jan/ Feb-26 volumes (+14% YoY) driven by a surge in demand from GST exemption. We expect the momentum to continue in Q4; weakness in NPAR volume continues to be a challenge for some players (HDFC Life/ SBI Life). Expect 4QFY26E VNB margin to improve across players with the impact of GST exemption fading. Valuations continue to remain undemanding. Reiterate BUY on Max FS (TP of INR 2,040 at 2.2x FY27E P/EV) as our top pick. Key monitorable from 4QFY26E results are:

(1) Growth guidance for FY27E

(2) Margin recovery trajectory.

Private life insurers have seen healthy growth in Jan and Feb-26 (+14% YoY) aided by sustained tailwinds from GST exemption. We expect robust growth in retail protection to aid volumes in Q4; however high competitive intensity in NPAR continues to be a challenge. On the margin front, expect a recovery across players with the impact of nonavailability of ITC credit post GST exemption fading.

* HDFC Life has seen flattish growth in Jan/ Feb-26 and we expect Mar-26 to be similar, implying APE growth of ~2% YoY in Q4. Tight liquidity due to the Gulf War, weak banca volumes and high competitive intensity in NPAR is likely to weigh on growth. Despite sustained growth in retail protection, Q4 is likely to see an unfavorable product mix (high share of ULIP/savings), resulting in lower margin. The company has indicated a gross impact of ~100 bps on FY26 VNB margin due to loss of ITC; we build 23.9%/ 24.2% in Q4/FY26E.

* IPRU Life has seen a de-growth (-1% YoY YTD) impacted by a slowdown in ULIP; we expect 3% YoY growth in Q4, factoring in a benign base, pick-up in credit life and sustained demand in retail protection/ NPAR. Higher sum assured/ rider attachment and longer tenure products are likely to offset the drag on profitability from non-availability of ITC credit. We factor in the same with a VNB margin of 24.0% for Q4 driven by better product mix and cost optimization.

* SBI Life has seen recovery in Q3, with sustained momentum in Jan/ Feb-26 volumes (+15% YoY on a YTD basis). We build a growth of 4% YoY in Q4 (factoring in a high base) led by strong growth in retail protection, PAR and ULIP. Company has guided for 13-14% APE growth for FY26; we build a similar trajectory. We build in 28.4%/ 27.5% VNB margin for Q4/ FY26E with an increase in the share of pure protection compensating for the drag of GST exemption.

* Axis Max Life has outperformed peers with APE growth of 22% YoY on a YTD basis. We expect the outperformance to continue (+12% YoY in Q4) with strong growth in retail protection volume and traction in new launches- Smart VIBE (NPAR), Smart ULIP. 9MFY26 VNB margin stood at 23.6%, and the company has reiterated a guidance of 24-25%; we build 25.9%/ 24.4% for Q4/ FY26E.

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