LIC zooms 9% as Street cheer insurer's multifold jump in Q2 net profit; ICICI Securities tags Buy - check price target

LIC Share Price NSE: Life Insurance Corporation of India (NSE: LICI) share price zoomed more than 9 per cent intraday on Monday, November 14, as Street cheered the state-owned insurer's robust September quarter results. The company reported a multi-fold jump in net profit to Rs 15,952 crore in the July-September quarter, boosted by profits from its investments. The insurer had reported a net profit of Rs 1,434 crore in the year-ago period, according to a regulatory filing.

LIC stock opened at Rs 663.95 on NSE, jumping more than 5 per cent the previous close of Rs 627.70. The stock made intraday high of Rs 684.90 apiece, gaining more than 9 per cent -- also best intra-day rally since listing in on May 4, 2022. At 10:50 AM, the counter quoted Rs 662.

The company's total premium income rose to Rs 1,32,631.72 crore in the second quarter of the current fiscal from Rs 1,04,913.92 crore in the same period a year ago. LIC's total income increased to Rs 2.22 lakh crore in the latest September quarter compared to Rs 1.87 lakh crore in the year-ago period.

Brokerage firm ICICI Securities maintained a Buy rating on LIC with a revised target of Rs 917 apiece, implying a 48 per cent upside.

Under-penetration, especially through a sum assured lens, high entry barriers and favourable regulatory environment make the brokerage positive on life insurance prospects in India and LIC is a play on the same, ICICI Securities said.

“Increasing non-participating mix and change in surplus distribution policy are significant growth drivers of the value of a new business (VNB) and in turn embedded value (EV). This makes LIC a strong investment proposition considering that it is currently trading at 0.73x FY22 price to EV,” it added.

“The multiple of 0.7x to EV is equivalent to almost 50 per cent market share correction based on current sensitivity of EV to equity market movements. Even at this multiple, resultant upside at CMP is 48 per cent, implying an attractive valuation of the stock,” ICICI Securities said.

So far this year, LIC has corrected nearly 24 per cent so far this year. In perspective, Rs 875.25 apiece on January 3 is now available at around Rs 665.00 apiece. The stock's 52-week range is Rs 918.95 - Rs 588.00.

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