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3 Quality Insurance Stocks Showing Upside Potential, Top Brokers Recommends Buy For High Returns

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Two top brokers KR Choksey & ICICI Direct have picked 3 leading Life Insurance Sector stocks with a Buy. These stocks are ICICI Prudential Life Insurance Company, SBI Life Insurance Company, and HDFC Life Insurance Company. SBI Life and HDFC Life are two Nifty 50 stocks. The stocks recently announced the Q3FY23 results. Here are the key highlights of the stocks:

 

1. ICICI Prudential Life Insurance Company Ltd.
 

1. ICICI Prudential Life Insurance Company Ltd.

Brokerage firm KR Choksey places a buy on the stock of ICICI Prudential Life Insurance with a target price of Rs 635/share. The stock with the given target price has the potential to give return up to 35% if purchased at the current market price.

The stock is currently trading at Rs 472.55/share on NSE. It was opened at Rs 472.05/share. On NSE, the stock's recorded 52 week low is Rs 430/share and the 52-week high is Rs 608.75/share. The stock has a market capitalisation of Rs 68,079.94 crore. It is ICICI Group's large-cap life insurance sector company.

The stock has fallen over 1% in the past 1 week, whereas, gained over 7% in the past 1 month. It gave 18.15% negative return in the past 1 year, and 6.88% in the past 3 years, respectively. However, in the last 5 years, it grew 9.65%.

According to the brokerage, In Q3FY23, the Gross Written Premium (GWP) grew 4.7% YoY, while declining by 1.2% QoQ at INR 97,805 Mn. The VNB for Q3FY23 grew by 20.0% YoY, while it was flat sequentially at INR 6,180 Mn, led by strong expansion in VNB margins. The VNB margin for Q3FY23 stood at 33.9%, up from 26.7% for Q3FY22. This was on account of a shift in the underlying product mix. The solvency ratio as of December 31, 2022, was 212% against the regulatory requirement of 150%. The total assets under management of the company were INR 2,519 bn as of December 31, 2022, a growth of 6.0% over INR 2,376 Bn as of December 31, 2021.

2. SBI Life Insurance Company Ltd.

2. SBI Life Insurance Company Ltd.

ICICI Direct has a buy on the stock of SBI Life with Rs 1,500/share. If you buy the stock at the current market price, it could give returns up to 16% from its current level. This is an SBI Group's large-cap company operating in the Insurance sector, having a market capitalisation of Rs 1,29,267 crore.

The current share price of the stock on NSE is Rs 1,292.80/share, trading 0.25% down from its previous close. Today, it opened at Rs 1,285/share. Its 52 week low is Rs 1,003.50/share and 52 week high is Rs 1,340.35/share, respectively.

The stock gained 5.23% in the past 1 month and 3.4% in the past 3 months, respectively. However, it fell 0.94% in the past 1 week. In 1 year it grew 3.87%, in 3 years it grew 30.71% and in 5 years it grew a maximum 79.76%, respectively.

SBIL's share price has grown ~30% in the past three years. Relatively superior growth, strong distribution and diversified product mix to aid business growth as well VNB margin ahead. The stock is reasonably priced and currently trades at 2.1x FY25E embedded value. "We retain our BUY rating on the stock. Rolling to FY25E, we value SBIL at ~2.5x FY25 EV and maintain our target price at Rs 1500 per share," the brokerage has said.

3. HDFC Life Insurance Company Ltd.

3. HDFC Life Insurance Company Ltd.

Brokerage firm ICICI Direct assigned a "Buy" on the stock of HDFC Life with a target price of Rs 690/share. The brokerage with the given target rice claims a return up to 17% on investments if purchased at the current market price today.

The stock's current market price is Rs 589.65/share on NSE, trading 0.15% down from the previous close. It was opened today at Rs 595/share. The stock recorded the 52-week low at Rs 497.05/share and the 52-week high at Rs 660.60/share, respectively. It is HDFC Group's large-cap insurance sector company having a market capitalisation of Rs 1,26,747 crore.

The stock has fallen over 2% in the past 1 week and grew over 4% in the past 1 month. It fell over 8% in the last 1 year, and over 4% in the last 3 years, respectively. It grew 28.66% in the last 5 years.

The brokerage said, HDFC Life's share price has given single digit return in the past three years. Being a player with a strong distribution and diversified product mix in opportunistic market provides confidence though near term clarity related to merger of parent could be ruled out. "We retain our BUY rating on the stock. Insurance under penetration coupled with focus on product mix to aid healthy business growth and VNB margin. Rolling over to FY25E, we upgrade our target price from Rs 635 to Rs 690, valuing HDFC Life at 2.6x FY25E EV," the brokerage has said.

Disclaimer

Disclaimer

The stocks have been picked from the brokerage reports. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.

 

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