LIC shares jump 6%; life insurer pips Infosys, ICICI Bank in m-cap race

Shares of Life Insurance Corporation of India Ltd (LIC) climbed over 6 per cent in Monday's trade, as a couple o brokerages upped their target prices on the insurance stock following better-than-expected quarterly results. In the process, LIC moved past Infosys Ltd and ICICI Bank Ltd (briefly) in the market capitalisation race to become the fourth most-valued stock on Dalal Street.

The LIC stock rose 6.39 per cent to hit a high of Rs 1,150 on BSE, as the largest life insurer at one point commanded market capitalisation of Rs 7,10,803.24 crore. This was higher than Infosys' m-cap Rs 7,00,056.87 crore and ICICI Bank's Rs 7,06,236.39 crore. Later, LIC cut gains and its market value dropped to Rs 7,02,707.24 crore.

LIC posted results above expectation in terms of policy growth and margins, Religare Broking said adding that the insurer managed to increase the portion of non-par products which aided the margin.

"The company’s recently launched product remained competitive in the market while it continued to maintain leadership position in both group and individual business. We expect its APE/VNB to grow at 9.4 per cent/16.5 per cent CAGR over FY23-26E and revise our rating to Accumulate (from Hold) along with target price revision to Rs 1,232 valuing the company at 1x of its FY26E embedded value," it said while suggesting a target price of Rs 1,232.

YES Securities suggested a target of Rs 1,250 on the stock.

"We have reduced our conservative 50 per cent haircut on unrealised value of equity investments to 25 per cent. We now value the business at core EV + 6 times VNB + 75 per cent of unrealised gains on the equity book. We also acknowledge that LIC’s value remains sensitive to capital market movements, any correction in capital markets can provide a downside to its EV and Fair value," Kotak said while upping its target on stock to Rs 1,300.

Antique Stock Broking said that it has increased its FY24–26 VNB by 13–14 per cent. This brokerage has upped its target price on LIC to Rs 1,080 from Rs 780 earlier, implying 0.8 times FY26E P/EV," the brokerage said.

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