LIC shares: Insurance stock headed for fresh yearly low within a month? Here’s what lies ahead

Shares of Life Insurance Corporation of India (LIC) are trading nearly 4% away from their 52- week low hit on Rs 530.20 on March 29, 2023. If the downtrend continues, the stock could make a fresh 52-week low within a month of hitting its yearly low on March 29.

LIC stock was trading 0.15% higher at Rs 550.10 against the previous close of Rs 549.30 on BSE. Market cap of the firm stood at Rs 3.47 lakh crore. The stock is trading 40% lower to its record high of Rs 920 hit on May 17, 2022. It has fallen over 21% in the last three months, logging its maximum loss since its listing on May 17, 2022.

In terms of technicals, the relative strength index (RSI) of LIC stands at 41.2, signaling neither the stock is overbought nor oversold. The stock is trading higher than the 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

LIC stock has fallen 19.76% this year. It hit a 52 week high of Rs 920 on May 17, 2022 and a 52 week low of Rs 530.20 on March 29, 2023. The stock is trading 3.77% away from the 52 week low on BSE.

Abhijeet from Tips2trade said, “LIC shares look slightly bullish on the Daily charts and now faces resistance at Rs 563. A daily close above this resistance could lead to targets of Rs 577-600 in the near term. Support will be at Rs 537."

Ravi Singh, Vice President and Head of Research, Share India said, "LIC stock is in bearish structure since it broke the major support of Rs 600 levels. The momentum indicators like RSI, MACD and Williams are in negative zone and suggest further weakness in the counter. Short term and long term moving averages are also in support of downtrend. The stock may touch the levels of Rs 520 in the coming trading sessions."

On April 6, BOB Capital Markets initiated coverage with a buy call to the LIC stock . It set the target price at Rs 800.

“The stock is currently trading at 0.5x FY25E EV, a 70% discount to private listed peers which appears unwarranted. We value LIC at 0.7x FY25E EV, a narrower 60% discount, translating to a TP of Rs 800 (45% upside) – initiate with BUY given the company’s entrenched brand equity, clear market leadership, superior agency force, improving margin profile and robust claim settlement ratio,” said the brokerage.

Meanwhile, the insurance behemoth said on Monday it recorded a 17 per cent rise in its total premium income in FY 2022-23. LIC’s total premium income climbed to Rs 2.32 lakh crore during FY2022-23 from Rs 1.99 lakh crore a year back. In terms of premium collected, LIC continues to hold a market share of 62.58 per cent as on March 2023, the insurer said.

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