BoB Capital Initiates Buy On Large Cap Insurance Stock, Sees Robust 46% Return

BoB Capital has picked Insurance behemoth Life Insurance Corporation of India Ltd. (LIC) with a "Buy rating. The brokerage initiates a buy for a target price of Rs 800/share on the stock of LIC. It claims a potential upside of upto 46% from the current market price if the stock is purchased today. LIC is a large cap public sector company having a market capitalisation of Rs 3,48,159 crore.

According to the brokerage, Extensive presence, brand equity and leadership in group life business serve as strong moats, supporting NBP market share of over 60%.

Stock's Current Market Price, 52 Week High/Low, Returns

The stock of LIC is currently trading at Rs 550/share, down 0.5% from the previous close. The stock hit its 52 week low on 29 March 2023 at Rs 530.05/share. Its 52 week high it recorded on 17 May 2022 at Rs 918.95/share.

The stock was listed on 17 May 2023. Since its listing, it has given 37.17% negative return. In the past week, it surges 1.08%. In 1 and 3 months, it fell 7.57% and 23.01%, respectively.

Behemoth at a bargain; initiate with BUY

The stock is currently trading at 0.5x FY25E EV, a 70% discount to peers which we expect will narrow. We value LIC at 0.7x FY25E EV (60% discount) for a TP of Rs 800 and initiate with BUY given the company's entrenched brand equity, clear market leadership, superior agency force, improving margin profile and robust claim settlement (95%+). Positive stock triggers include a more profitable product mix, structural rise in VNB margins and a sustained reputation for settling claims.

Disclaimer - The stock has been picked from the brokerage report of BoB Capital Markets. 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.