- Date : 15/11/2022
- Read: 3 mins
LIC share outlook in the wake of the recent rally and strong Q2 financial performance
Life Insurance Corporation of India has recently released its quarterly results, triggering a rally in its share prices. The insurance heavyweight has performed exceedingly well in the second quarter of FY 2023, with an increase in revenue, profit and asset under maintenance.
Result Summary
LIC’s quarterly result sees a marked improvement from the performance reported during last year’s quarter 2.
- From a revenue of Rs 1.85 lakh crore in Q2 FY22, the revenue in Q2 FY23 has increased to Rs 2.2 lakh crore.
- The net profit has increased to Rs 15,592 crore from Rs 1,433 crore. The unprecedented increase is due to a change in accounting policies but also rise in premium income and investment income.
- The net premium receipt was Rs 1.3 lakh crore, which saw an increase of 27% on QoQ. The first-year premium increased by 11.3% while single premium collections rose by 62%.
- LIC’s income from investments also increased by 10% to over Rs 84,000 crores.
- Its AUM increased to Rs 42.93 crores, from the last year’s figure of Rs 41.02 lakhs.
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Share Price Timeline
LIC went public in May this year for an IPO price band of Rs 902 to Rs 949. It was listed at a discount and has seen a downward slide ever since. By the first week of June 2022, it was trading at around Rs 800. This was followed by a prompt slide to go below Rs 700 within 10 days. It has remained in the Rs 600-700 range from mid-July till date, touching a 52-week low of Rs 588 in October 2022 before recovering.
Following the Q2 results, it gained over Rs 40 on 14 November 2022 to open at Rs 668. For IPO investors who have seen their investment erode by around 25%, the recent rally may seem like a flash in the pan.
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Analyst Outlook
ICICI Securities have given a Buy rating to LIC shares, estimating a target price of Rs 917.
BofA has similarly given a positive outlook for LIC, quoting a surge of up to Rs 945. The share’s discounted pricing and the company’s value of new business give this sign of optimism, BofA observed.
IIFL Securities has pronounced a more cautious target of Rs 720 in the near term. The firm has advised a stop-loss of Rs 630.
Choice Broking has advised long-term investors to wait for the breakout. It expects an upside movement of Rs 700 again, with a stop-loss of Rs 630. They have also advised traders to buy the shares at Rs 600 levels as and when available while keeping a stop-loss of Rs 580.
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After over six months of anxiety and concern among the investors over the chances of recovery in LIC stock price, a positive Q2 performance has rejuvenated the market interests. Watch the share regularly to find out if it finally recovers or slips back to another period of stagnation.
