1 Zero-Debt PSU Giant LIC Stock To Give 15% Returns In Short Term, Target Price Rs 1,360; BUY Next Week?

Brokerage SMC Global Securities has picked LIC as its technical pick for the trading session from July 28th to August 2nd. LIC which was India's biggest IPO in history, has surged by over 37.5% on BSE year-to-date. In a year, the stock rallied by more than 88%. Since listing in May 2022, the stock however has surged by nearly 43%. There is potential of over 15% on BSE and NSE, if the stock is bought next week. The target is short term.

Currently, this PSU stock is at Rs 1180.40 apiece on BSE with market cap of Rs 7,46,602.73 crore. On July 26, the stock touched a new 52-week high of Rs 1,197, while nearly doubled from its 52-week low of Rs 597.65 apiece.

As per the brokerage, the stock closed at Rs.1184.35 on 26th July, 2024. It made a 52-week low at Rs.597.35 on 26th October, 2023 and a 52-week high of Rs.1197 on 26th July 2024. The 200 days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 918.

SMC's note added that the stock has been consolidating in broader range of 900-1150 from last more than four months with prices seen holding well above its 200 days exponential moving average on daily charts. Over the period of consolidation, the stock has formed an Ascending Triangle pattern on short term charts.

In the last week's trading session, SMC highlighted that it observed a fresh breakout into the stock above the pattern formation with prices seen rising above its key resistance level of 1150 as well. The sudden spike in volume activity along with breakout suggests for further upside into the stock.

Therefore, SMC advised its investors that "one can buy the stock in range of 1160-1180 for the upside target of 1350- 1360 levels with SL below 1040 levels." rom the current market price, this would be a potential of 15.2% upside in LIC share price in the short term.

Meanwhile, as per Trendlyne data, the consensus recommendation from 17 analysts for Life Insurance Corporation of India is BUY.

In terms of fundamentals for the stock, as per Trendlyne, the stock rose 88.61% and outperformed its sector by 25.07% in the past year. Also, its Debt to Equity Ratio is zero as the company is debt-free. Further, Mutual Fund Holding increased by 0.11% in the last quarter to 0.79. Also, Promoter Pledges are zero.

Additionally, the data highlighted that Price to Earning Ratio is 18.31, lower than its sector PE ratio of 20.52. While LIC's Return on Equity(ROE) for the last financial year was 49.44%, more than 20% in the last financial year, indicating an efficient use of shareholder's capital to generate profit.

Life Insurance Corporation of India is an Indian multinational Central Public sector life insurance company headquartered in Mumbai. It is India's largest insurance company as well as the largest institutional investor with total assets under management worth ₹52.52 trillion as of March 2024, as per Wikipedia.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.