LIC share price today: LIC shares opened higher for the third day in a row and touched an all-time high of Rs 678.80 per share, up nearly 2 per cent on Wednesday morning to reach yesterday’s close of Rs 665.20 per share. This comes after LIC shares hit a new all-time low of Rs 650 per equity share on the NSE on Friday.
According to stock market experts, such a rally in LIC’s shares should be considered a mere jump which has come about due to short covering. He said the LIC shares fell before the end of the lock-in period for anchor investors. He further added that the fundamentals of the stock are still weak and one should avoid taking fresh positions in the life insurance stock till it gives a breakout.
JP Morgan has initiated coverage on LIC stock with an overweight trend and a target price of Rs 840. “The thesis centers on the embedded value of 0.75 times that of LIC – a measure of the market value of an insurer’s current and future policies,” the global brokerage said.
“LIC’s new business value is only 1 per cent of its policies. Therefore, with the 99 percent value of the old policies, we consider the 0.75x P/EV to be unnecessarily harsh, even assuming no growth. In fact, LIC has recently accelerated growth,” JP Morgan said.
It has projected a growth of 6 per cent in FY22-24 for the public sector insurer.
JP Morgan in its report said, “LIC registered 44 per cent market share in FY22 but has lost market share in the last five years. LIC’s retail premium is growing faster than the industry and as of 2019 The LIC portfolio is focused on addressing the white space. It is promoting distribution as well as opening up upside risk, across the agency and other channels,” the report noted. had acted primarily in the national interest. Its surplus was fully distributed to policyholders and the government. The regulatory change now ensures that LIC retains higher profits,” JP Morgan said.
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