ITC, Coal India, L&T, MTNL: LIC owns over 10% stake in these 14 firms; should you buy?

Life Insurance Corporation of India (LIC), the country’s biggest institutional investor, held at least 14 stocks with a stake of over 10 per cent as on March 31, 2023. Initial shareholding data showed that the insurance behemoth held a 45.24 per cent stake in LIC Housing Finance in Q4FY24. Shares of LIC Housing Finance have declined 12 per cent in the past one year, while the benchmark BSE Sensex has gained 5 per cent during the same period.

With a stake of 19.99 per cent, Standard Batteries is next on the list in terms of percentage. It was followed by Modella Woollens (17.31 per cent), Cochin Malabar Estates & Industries (16.77 per cent), ITC (15.27 per cent) and NMDC Steel (14.16 per cent).

Shares of ITC have gained nearly 50 per cent to an all-time high of over Rs 400 in the past 1 year. On the other hand, Standard Batteries, Modella Woollens and Cochin Malabar Estates & Industries declined 28 per cent, 34 per cent and 7 per cent, respectively. Shares of NMDC Steel got listed on bourses on February 20 after the demerger of NMDC’s steel business. The stock got listed at Rs 37.75 per share. The scrip traded at Rs 32.06 on April 17, 2023.

Brokerage Sharekhan is bullish on ITC with a target price of Rs 450. “ITC has delivered a resilient performance in the past few quarters, despite an uncertain demand environment and sustained inflationary pressures on margins. The resilient performance was driven by a good recovery in its core cigarette business (in the post-Covid era), steady double-digit growth in the non-cigarette FMCG business, and accelerated growth in the hotel and paperboard, paper and packaging (PPP) business,” Sharekhan said.

The insurance major also held over 10 per cent stake in Mahanagar Telephone Nigam, Hindustan Copper, Larsen & Toubro, Hero MotoCorp, Rajesh Exports, Coal India, Bharat Heavy Electricals and National Fertilizers as on March 31.

ICICI direct is positive on Coal India, one of the largest coal producers in the world, with a target price of Rs 260. Shares of the company jumped 21 per cent to Rs 229.50 on April 17, 2023 from Rs 189.40 on April 18, 2022. In FY22, Coal India produced 623 million tonnes (MT) while offtake was at 662 MT.

“Coal India reported healthy growth in volume for FY23 wherein it slightly bettered its production volume guidance of 700 MT. Going forward, we expect healthy traction in volumes to continue. Hence, we upgrade the stock from ‘Hold’ to ‘Buy’.

Prabhudas Lilladher is bullish on Hero MotoCorp (HMCL) with a target price of Rs 3,135, indicating an upside of 28 per cent from the current market price. “We expect HMCL to show double-digit revenue growth in FY24 benefiting from a low base, improving consumer sentiment, stable pricing environment (as commodity prices stabilise) and helped by internal factors like product launches in premium or scooter segment and higher exports,” the brokerage said in a report on April 6.

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