LIC shares: In response to better-than-expected quarterly results, a few brokerages increased their target prices on Life Insurance Corporation of India Ltd. (LIC), which saw a spike in shares of over 6% on Monday. By doing this, LIC became the fourth most valuable stock on Dalal Street, briefly surpassing Infosys Ltd and ICICI Bank Ltd in the race for market capitalization.
The biggest life insurer at one point had a market capitalization of Rs 7,10,803.24 crore, and the LIC stock increased 6.39 percent to reach a high of Rs 1,150 on the BSE. This was greater than the m-cap of ICICI Bank at Rs 7,06,236.39 crore and Infosys at Rs 7,00,056.87 crore. Subsequently, LIC reduced its gains, resulting in a decline in market value to Rs 7,02,707.24 crore.
Religare Securities stated that LIC exceeded forecasts for policy growth and profit margins, and that the insurer was able to raise the percentage of non-par products, which helped the margin.
“The business maintained its leadership position in both group and individual business, and its recently launched product remained competitive in the market. It stated, “We revise our rating to Accumulate (from Hold) and target price revision to Rs 1,232 valuing the company at 1x of its FY26E embedded value. We expect its APE/VNB to grow at 9.4%/16.5% CAGR over FY23-26E.”
For the stock, YES Securities recommended a target price of Rs 1,250.
Kotak revised its valuation methodology, decreasing the conservative haircut on unrealized equity investments from 50% to 25%. They now assess the business by combining core enterprise value with six times the value of new business, plus 75% of unrealized gains on the equity portfolio. Kotak also noted the sensitivity of LIC’s value to market fluctuations, highlighting potential downside risk to enterprise value and fair value in case of a market correction. Consequently, they raised their stock target to Rs 1,300.
According to Antique Stock Broking, its FY24–26 VNB increased by 13–14 percent. This brokerage increased its target price for LIC from Rs 780 to Rs 1,080, which indicates 0.8 times FY26E P/EV, according to the brokerage.
