ICICI Securities Picks This Insurance Sector Stock, Recommends Buy For 24% Potential Upside

ICICI Securities in its December 16, 2022 Insurance sector report picks Life Insurance Corporation Of India (LIC) with a target price of Rs 917/share. The brokerage recommends "Buy" stocks with a target price of Rs 917 per share. According to the Brokerage's given target price and the current market price (CMP), the stock is likely to give a potential gain of up to 24%. LIC is a state-owned large cap Insurance company. It is India's largest insurer with a market capitalisation of Rs 4,68,018 crore.

Stock Outlook, 52 Week low and high, & Returns

The Current Market Price of the LIC is Rs 739.95 apiece, closed after gaining 0.73% from its previous close. The 52 week high of the stock is Rs 918.95 recorded on 17 May 2022 and the 52-week low is Rs 588 recorded on 21 October 2022, respectively. The stock over the past 1 week has given 3.01% positive return and in the past 1 month, it gave 15.83% positive return, respectively. In the past 3 months, it has given 12.74% positive return. It was listed on 17 May 2022, and since its date of listing, it fell 15.46%.

Life Insurance Corporation (LIC) has done particularly well in FY23-TD; could potentially lead to estimate upgrades

Total APE growth in FY23-TD for LIC has been strong at 30.5%. Even if the company reports 10-15% YoY growth for the remaining months of the year, its total APE growth would be 21-23% in FY23. This could potentially lead to upgrades in earnings estimates, especially considering that there are levers for margin growth ahead (e.g. mix change towards non-par, mix change within group to annuity/term, increase in surplus distribution in par segment). Stable markets could further provide support given that there may not be any negative variances in H2FY23. "We have a BUY rating on LIC with a target price of Rs917 based on 15x FY24E VNB of Rs98bn and 0.7x FY24E EV of Rs6.2trn," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. 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.