The shares of the largest insurance company, Life Insurance Corporation of India opened at Rs 665 on Tuesday. However, till the afternoon the stock declined by 1 percent to trade at Rs 657 levels.
This came after the stock rallied by more than 8 percent on Monday after the insurer reported robust growth in its financials in the latest quarter. Their standalone net profit in Q2FY23 stood at Rs 15,952 crore which has increased multifold from Rs 1,433 crore Year on Year.
The net premium income of the company increased 26 percent year on year to Rs 1.32 lakh crore up from Rs 1.04 lakh crore in the year-ago period.
Life Insurance Corporation of India is an Indian public sector undertaking (PSU) company that stands as the largest insurance provider company in India. It has a high market share in the new business premiums.
The stock was listed on the Indian stock exchange in May this year. Currently, it is trading at a discount of approximately 20% from its listing price of Rs 872 a piece.
Domestic brokerage firm ICICI Securities initiated coverage on LIC with a target price of Rs 917 per share which represents an upside of 38% from the current levels.
“Increasing non-participating mix (currently ~5% in APE mix as of Q1FY23) and change in surplus distribution policy are significant growth drivers of the value of the new business (VNB) and in turn embedded value (EV). This, against the strong growth outlook of the Indian life insurance (especially through the lens of sum assured), makes LIC a strong investment proposition considering it is currently trading at 0.73x FY22 price to EV,” said the brokerage.
The company has a market cap of Rs 4,15,868 crore which makes it the 14th largest company in India in terms of market capitalization as on November 15th, 2022.
Written by Anoushka Roy
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