Sharekhan List 4 Insurance Stocks Showing Growth Potential, Sees Upside Up To 43%, Recommends Buy

Sharekhan has recently released the Q3FY2023 Results Preview report on Insurance Sector. The brokerage maintains a positive outlook on the sector. It recommends "Buy" 4 quality large-cap and mid-cap stocks. These 4 stocks are HDFC Life, ICICI Prudential life, ICICI Lombard, and Max Financial. The brokerage is optimistic about the sector and sees a robust upside in the share price of the stocks up to 43%.

The brokerage in the report has stated, "For life insurers under our coverage, premium growth is expected to remain modest. Annuity, non-PAR and credit life are expected to do better. Protection and ULIP segments are likely to see a gradual recovery amid a volatile market. VNB margins are expected to remain healthy across players. For a non-life insurer, GDPI growth is expected to be healthy driven by health and motor insurance."

1. HDFC Life Insurance Company Ltd.

The brokerage initiates buy on the stock with a target price of Rs 670/share, claiming 12% potential upside. HDFC Life is a large cap Insurance sector company having a market capitalisation of Rs 1,27,677 crore.

The current market price of the stock on NSE is Rs 598.85/share, trading 0.17% down from the previous close. Its 52 week high is Rs 678.80/share and its 52 week low is Rs 497.05/share, respectively.

The stock has fallen 1.75% in the last 1week. It gave 11.06% negative return in the last 1 year, and 3.9% negative return in the last 3 years, respectively. However, in the last 5 years, it gave 31.33% positive return.

According to the brokerage, New business premium to see a healthy growth aided by annuity & Non-par segment. Expect VNB growth to remain modest.

2. ICICI Prudential Life Insurance Company Ltd.

Sharekhan has a buy on the stock with Rs 660 target price. It claims a potential upside of 43% upside. ICICI Prudential Life is a large cap Life Insurance stock having a market capitalisation of Rs 66,519.56 crore.

The stock is currently trading at Rs 462.60/share on NSE, 0.19% up from the previous close. It recorded its 52 week high at Rs 648.85/share and 52 week low at Rs 430/share, respectively.

It fell 1.87% in the last 1 week. In the last 1 year, it fell 21.31% and 5.24% in the last 3 years, respectively. The stock has given 14.2% positive return in the last 5 years.

According to the brokerage, New business premiums to see modest growth. Expect VNB growth to remain modest and margin expected to remain stable.

3. ICICI Lombard General Insurance Company Ltd.

Sharekhan recommends buy the stock of ICICI Lombard with a target price of Rs 1,400/share. With the given target price, the stock is likely to surge 14% from its current level.

On NSE, the stock is trading at Rs 1,235.50/share, 0.52% down from the previous close. It recorded 52 week high at Rs 1,465/share and 52-week low at Rs 1,071/share, respectively.

The stock in a week has fallen 3.3%. It moved down 13.47% in the past 1 year, and 10.18% in the past 3 years, respectively. However, it moved up 56.24% in the past 5 years, giving a positive return.

According to the brokerage, Premium growth to be strong driven by health and commercial lines. Claim ratios to moderate sequentially.

4. Max Financial Services Ltd.

Sharekhan placed a buy on the stock with a target price of Rs 1,020/share. Stock purchased at the current market price would you a return of 29%. Max Financial is a midcap company with a market capitalisation of Rs 27,585.02 crore.

The stock's current market price is Rs 795.45/share on NSE. Its 52 week high is Rs 1,080.70/share and 52 week low is Rs 625.20/share, respectively.

The stock has given 8.42% positive return in the last 1 week. However, it gave 24.27% negative return in the last 1 year. In the last 3 years, it gave maximum 56.06% positive returns. Whereas, in the last 5 years it gave 40% positive return.

According to the brokerage, Revival in NBP growth to be key. Expect VNB growth to remain healthy and margins are expected to moderate bit.

Disclaimer

The stocks have been picked from the brokerage report of Sharekhan. 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.