HDFC Life Insurance Company’s share value has been on a downward spiral for the past week, hitting a fresh 52-week low of ₹473.70 on Monday. However, Chennai-based certified financial planner D. Muthukrishnan sees the stock as an easy ‘long-term holding’ pick for investors.
What Happened? D. Muthukrishnan, a popular personality in the finance space and founder of Wise Wealth Advisors, believes that HDFC Life’s drop off in value over the past week will only be short-term.
Muthukrishnan who took to Twitter over the weekend to share his views, stating that the current downturn that has affected HDFC Life and the domestic insurance sector, in general, is only an outcome of the Union Budget announcement last week — a sentiment that he expects to change soon.
“After the budget, my timeline is filled with comments like ‘Life insurance is dead’ and ‘HDFC Life is dead’. It’s your wish to write an obituary for a sector or a company. Let’s wait for 3 years and see whether your wish comes true or both the sector and the company continue to grow,” tweeted Muthukrishnan.
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Quoting an exchange filing by HDFC Life, Muthukrishnan also noted how HDFC Life interacted with 82 institutional investors and answered their queries in a conference call organised by Australia-based global financial services group, Macquarie Group Limited. “That’s what great companies do,” wrote the financial advisor.
Life insurance companies saw themselves under pressure after Finance Minister Nirmala Sitharaman’s Union Budget speech for the 2023 financial year proposed to limit income tax exemption from proceeds of insurance policies in certain cases. As per the Budget documents, an individual will have to pay tax on the maturity amount of life insurance policies where the aggregate annual premium exceeds ₹5 lakh.
Price Action: HDFC Life Insurance Company shares are trading 1.22% lower today at ₹482.95
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