LIC Shares Have Surged 20% In 15 Days — Analysts See Further 40% Rally

Shares of Life Insurance Corporation have climbed up sharply in the last two weeks gaining strength from the positive developments around the Adani Group. Analysts at Kotak Securities see the stock going further up to not only reclaim its IPO price but even surpass it.

The LIC Analyst: Analysts at Kotak Securities maintained the “buy” rating for the stock with a price target of ₹1,040. The target indicates an around 40% upside from the stock’s current market price of ₹740.

The LIC Thesis: The brokerage firm noted that LIC has recently introduced a non-participating product, namely LIC Jeevan Utsav, generating considerable buzz in the market. The analysts said that while LIC’s Internal Rates of Return (IRR) slightly lag behind those of competitors, there is substantial potential for enhanced volume growth and improved margins through a robust marketing strategy.

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The domestic brokerage firm thinks that despite the current IRR differentials, a compelling marketing pitch can bolster the company’s volume growth and margins. The brokerage also added that LIC’s current valuation remains “inexpensive, providing big headroom.”

The brokerage also pointed out that the insurance giant is currently trading at a discount when compared to its private sector counterparts.

Price Action: LIC’s share price was up 2.50% to trade at ₹764.65 in the early hours of trading on Thursday.

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Posted In: Analyst ColorEquitiesLong IdeasPrice TargetReiterationMarketsAnalyst RatingsTrading IdeasKotak Institutional EquitiesLife Insurance Corporation of India