LIC shares jump to see best intraday gain since listing as Q2 profit surges. Should you buy?

LIC shares jump to see best intraday gain since listing as Q2 profit surges. Should you buy?

After announcing a spike in profit for the second quarter ending September 2022

  • Life Insurance Corporation of India (LIC) shares jumped as high as 9% to 682/share on the BSE on Monday. This was their largest intra-day percentage increase since becoming public in May.
  • Due to an increase in premium income, significant gains from changes in its accounting method, and investment income, the national insurance LIC recorded a multifold increase in net profit in Q2 from 1,434 crore to 15,952 crore.

The value of new business (VNB) and, consequently, embedded value, are significantly impacted by changes in the surplus distribution policy and the increase in the non-participating mix (EV).

This contrasts with the Indian life insurance market's high growth prospects (particularly when seen through the lens of amount assured), which makes LIC a compelling investment opportunity. Concerns about equity sensitivity to EV are exaggerated, and underappreciated is how simple it is to increase VNB margin through a change in mix, according to ICICI Securities. The brokerage firm has kept its Buy rating and a 917 per share target price on the shares of LIC.

"Long-term investors should monitor the 700 levels on the chart pattern for a potential breakout. The insurance stock is anticipated to surge sharply upward after closing over $700 per share levels.

The stock now has support at 630, however if this support is broken, LIC shares may rise as high as 580 levels. Therefore, it is advisable for long-term investors to wait for the breakout and crash. According to Sumeet Bagadia, Executive Director at Choice Broking, they should purchase either around 600 apiece levels with a stop loss below 580 or above 700 levels with a stop loss at 630 apiece levels.

"Early in the session, the price of the LIC share indicated a trend reversal on the chart. The stock may increase to levels of 700 to 720 per piece in the near future. Those who own this stock in their portfolio are recommended to hold it with a stop loss at 630 and an upside objective of 720 in the near future. For new investors with a short-term outlook, one can purchase the company at present levels with a strict stop loss at levels of $630 per share "the vice president of research at IIFL Securities, Anuj Gupta, remarked

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