LIC shares jump to see best intraday gain since listing as second-quarter earnings surge. Should I buy?

Shares of Life Insurance Corporation of India (LIC) jumped 9% to reach 682 apiece on BSE in Monday’s opening session, posting their best intraday percentage gain since listing in May, after reporting an increase in profits for the second quarter ended September 2022.

National insurer LIC announced a multiple increase in its net profit to 15,952 crores in Q2 from 1,434 crores a year ago, thanks to rising premium income and massive gains from changes in its accounting policy as well as investment income.

“Increasing the non-participant mix and changing the overage distribution policy are important growth drivers for new business value (NBV) and, therefore, intrinsic value (EV). This , relative to India’s strong growth outlook for life insurance (particularly through the lens of sum assured), makes LIC a solid investment proposition. overstated and the relative ease of increasing the VNB margin through a change in mix is ​​underestimated,” ICICI Securities said. The brokerage maintained the buy rating on LIC-Shares with a target price of 917 each.

“Long-term investors should wait for the possible breakout by watching 700 levels on the chart model. Insurance stock set to give strong upside move after closing above 700 levels each. Currently, the stock has support at 630 but in the event of a break in this support, LIC’s shares can go up to 580 levels. It is therefore advisable for long-term investors to wait for the breakout and the breakdown. They should buy either at 600 top levels keeping the stop loss below 580 or more 700 levels keeping the stop loss at 630 levels each,” said Sumeet Bagadia, executive director of Choice Broking.

“LIC stock price gave a trend reversal on the chart pattern early in the session. The stock may go up to 700 to 720 levels each in short term. Those who have this security in their portfolio are advised to maintain a short-term upside target of 720 keeping the stop loss at 630. For new investors with a short-term view, stocks can be bought at current levels for 720 target maintaining a strict stop loss at 630 levels each,” said Anuj Gupta, vice president of research at IIFL Securities.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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