LIC shares rise ahead of Q4 results today; here's what analysts expect

Insurance behemoth Life Insurance Corporation of India (LIC) shares were in demand ahead of its March quarter earnings for the financial year 2022-23 on Wednesday, May 24, 2023.

The state-run insurer’s share price surged around 2.5 per cent to touch the day’s high level of Rs 604 per share on the BSE.

At around 12:30 PM, the stock quoted Rs 596.85 per share, up 6.90 per cent or 1.17 per cent today from the previous day’s closing of Rs 590 apiece on the BSE.

According to a domestic brokerage house Phillip Capital, life insurers' annual premium equivalent (APE) growth is expected to be muted in the quarter ended in March 2023 and non-PAR and annuity to report strong growth during the three-month period.

Akshay Jain of JM Financial in a report on LIC had expected that the government-owned insurance giant would be able to maintain its new business margins in the 15-16 per cent range aided by favourable product mix and cost controls.

He added that the current valuation of LIC of 0.5x FY25E EV is undemanding and expect it to rerate on the back of its key strengths such as large customer, huge agency network, strong brand equity and, importantly, the sovereign guarantee attached to LIC policies.

The brokerage maintained a ‘buy’ rating on the stock with a target price of Rs 940 per share, implying almost 60 per cent upside potential.

Besides Q4 results, LIC is also expected to announce dividend for FY23. "The Board of Directors will consider, inter alia, the proposal for recommending final Dividend for the FY 2022-23, If any, in the meeting to be held on 24th May 2023," the state-run life insurance giant's regulatory filing said.

LIC shares earlier las week completed one year in the secondary market on Wednesday, May 17, 2023. The stock had started trading on bourses BSE and NSE with the symbol LICI from May 17, 2022.

The counter changes hands at a discount of 37-40 per cent to the price range since its listing last year as compared to 14 per cent rise in the Nifty50 index.