LIC surges as Macquarie analyst Suresh Ganapathy upgrades stock – Moneycontrol

My Account
Follow us on:
Powered By
Learn, discover & invest in smallcases across different types to build your long term portfolio.
Invest Now
Explore from India`s leading investment managers and advisors curating their strategies as smallcases.
Invest Now
Powered By stockal
Diversify your portfolio by investing in Global brands.
Invest Now
Pre-configured baskets of stocks & ETFs that you can invest
in with a single click. Developed by hedge funds, global
asset management companies, experienced wealth
management firms and portfolio managers.
Invest Now
Gamechangers
AMBAREESH BALIGA
Fundamental, Stock Ideas, Multibaggers & Insights
Subscribe
CK NARAYAN
Stock & Index F&O Trading Calls & Market Analysis
Subscribe
SUDARSHAN SUKHANI
Technical Call, Trading Calls & Insights
Subscribe
T GNANASEKAR
Commodity Trading Calls & Market Analysis
Subscribe
MECKLAI FINANCIALS
Currency Derivatives Trading Calls & Insights
Subscribe
SHUBHAM AGARWAL
Options Trading Advice and Market Analysis
Subscribe
MARKET SMITH INDIA
Model portfolios, Investment Ideas, Guru Screens and Much More
Subscribe
TraderSmith
Proprietary system driven Rule Based Trading calls
Subscribe
Moneycontrol  PRO
Moneycontrol  PRO
Curated markets data, exclusive trading recommendations, Independent equity analysis & actionable investment ideas
Subscribe
Curated markets data, exclusive trading recommendations, Independent equity analysis & actionable investment ideas
Explore
STOCK REPORTS BY THOMSON REUTERS
Details stock report and investment recommendation
Subscribe
POWER YOUR TRADE
Technical and Commodity Calls
Subscribe
INVESTMENT WATCH
Set price, volume and news alerts
Subscribe
Shares of Life Insurance Corporation of India (LIC) gained more than 3 percent on August 16 after Macquarie Capital Securities’ analyst Suresh Ganapathy upgraded the stock following its June quarter earnings.
Macquarie upgraded the stock to “outperform” from “neutral”, arguing that cheap valuations of the scrip drove the upgrade. The brokerage firm, however, sees less upside in the stock than before as it cut its price target by 15 percent to Rs 850 to account for discount valuation because of the company’s government ownership.
Brokerage firm Macquarie said that enhanced disclosures made by the life insurance giant for 2021-22 also helped in the upward revision in the value of new business (VNB) and embedded value forecasts made by it.
The embedded value represents the corporate value of a life insurer that is important to understand what its shareholders will get if the firm were to be sold.
LIC’s June quarter performance was underwhelming, as net profit slumped 71.2 percent on-quarter to Rs 2,371.6 crore, while standalone total premium contracted 31.6 percent to Rs 98,351.8 crore.
The company’s market share in first-year premium income stood at 65.42 percent at the end of the June quarter, down from 67.52 percent in the year-ago quarter.
The country’s largest life insurer saw its value of new business margin decline to 13.6 percent from 15.1 percent in the March quarter. LIC alluded to the change in product mix during the quarter as the main reason for the sequential decline in VNB margins.
Value of new business, a key metric of profitability, represents the additional earnings that will be generated from selling an insurance policy during a particular period.
LIC’s Chairman MR Kumar told analysts in a post-earnings conference call that the fall in the new business margin in the June quarter is a “temporary blip” and the value of new business margin will improve once the life insurer increases the share of high margin protection plans.
At 11.26 am, shares of Life Insurance Corporation were up 3 percent at Rs 703 on the National Stock Exchange.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited.
Copyright © e-Eighteen.com Ltd All rights resderved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express writtern permission of moneycontrol.com is prohibited.

source

Leave a Comment