New Delhi: The surge in Life Insurance Corporation (LIC) of India’s share price over the past four months has garnered considerable attention. During this period, the stock has witnessed a significant rally, climbing from approximately ₹600 to ₹1,066 per share, marking an impressive increase of around 75 percent.
Experts attribute this upward trajectory to several factors, notably the robust performance reported in the third quarter of the fiscal year 2024, coupled with the company’s dominant market position and a shift in investor sentiment favoring shares that had not participated substantially in the rally of public sector undertaking (PSU) stocks.
Omkar Kamtekar, a Research Analyst at Bonanza Portfolio, highlighted LIC’s strategic initiatives aimed at enhancing its Value of New Business (VNB) margin by diversifying its product mix to increase revenue from non-participating products. He emphasized the positive market response to LIC’s Q3FY24 results, which showcased a notable increase in the Individual Non-participating business segment, particularly in individual savings, contributing to a significant rise in revenue share.
Similarly, Shreyansh V Shah, a Research Analyst at StoxBox, underscored LIC’s impressive performance in Q3FY24, marked by a substantial increase in net profit and a significant tax refund from the Income Tax Department. Additionally, the launch of innovative products such as LIC’s Jeevan Utsav, combining individual savings and whole life insurance, further bolstered investor confidence and received a favorable market response.
Furthermore, LIC’s advantageous market position, coupled with a broader market trend favoring PSU companies and a bullish stock market, contributed to its stock’s upward momentum. Analysts also noted LIC’s attractive valuations compared to its peers, indicating potential undervaluation and room for further growth.
In conclusion, the recent surge in LIC’s share price can be attributed to a combination of factors, including strong financial performance, strategic initiatives, market sentiment, and attractive valuations, signaling optimism among investors regarding the company’s growth prospects.
