LIC share price declined up to 1.49% on Q2 results. Should you buy, sell or hold the stock? Check brokerage views

  • Q2 Result review - Life Insurance Corporation of India declared Q2 results on 10 November, post market hours. The topline decreased by 9.2% & the profit decreased by 49.35% YoY. As compared to the previous quarter, the revenue grew by 6.85% and the profit decreased by 16.65%.

Livemint, Edited By Ujjval Jauhari
Published13 Nov 2023, 10:00 AM IST
Life Insurance Corporation (LIC)
Life Insurance Corporation (LIC)

Life Insurance Corporation of India share price declined up to 1.49% on the BSE in morning trades on Monday. Life Insurance Corporation of India had declared its Q2 FY24 results on 10 November 2023, post market hours. The topline decreased by 9.2% and the profit decreased by 49.35% YoY. As compared to the previous quarter, the revenue grew by 6.85% and the profit decreased by 16.65%.

The Selling, general & administrative expenses rose by 55.58% sequentially and decreased by 41.47% Y-o-Y. The operating income was down by 12.36% sequentially and decreased by 50.1% Y-o-Y.

The Earning per share came at 12.77 for Q2 FY24, which decreased by 42.51% Y-o-Y.

Also Read- Stocks to Watch: Protean eGov Tech, CIL, LIC, Eicher Motors, ONGC, Biocon

Commenting on the results analysts at Emkay Global Financial services said that Life Insurance Corporation of India Ltd (LIC) reported broadly in-line numbers in H1FY24, owing to weaker growth, strong boost in embedded value led by equity-market performance, and part provision on account of increased family pension liabilities. They added that they continue to perceive that structural challenges such as slower growth-led market-share loss, sticky operating expenses, and higher sensitivity to equity market-led EV (embedded Value) volatility—are likely to cloud LIC’s  outlook.

 However, Emkay says that on valuation front LIC is currently trading at ~0.50 times September 2025 estimated Price to EV ratio, with the structural challenges and a possible share sale by the government already in the price. Hence Emkay has upgraded the stock to BUY, as they believe higher surplus generation and slower growth could lead to a step jump in dividend, as solvency is healthy. Also their fair value September 2024 estimated target price is Rs760 per share (offering 25% upside), and they value the shares at 0.63x September-25 EV (Cost of Equity: 13%; Operating Return on Embedded value (RoEV): 10%; Single Stage Growth: 5%)

RoEV is an important measure of a company's valuation. This indicates as how much profits a company is able to release each year out of the embedded value it has locked in.

Embedded Value (EV) and Value of new Business (VNB) are two important parameters for assessing the prospects and valuations of an insurance provider.

Also Read-6 things that changed for the stock market over weekend - Gift Nifty to Moody’s US outlook cut

Motilal Oswal Financial Services Ltd (MOFSL) also has raised its EV (embedded value) estimates owing to better-than-expected equity market returns. They reiterate our BUY rating on the stock with a Target price of 850 (0.7 times FY25 estimated EV).

However, MOFSL has cut its VNB (value of new business) estimates to factor in the decline in VNB margins.

 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:13 Nov 2023, 10:00 AM IST
Business NewsMarketsStock MarketsLIC share price declined up to 1.49% on Q2 results. Should you buy, sell or hold the stock? Check brokerage views

Most Active Stocks

Tata Steel share price

152.45
03:29 PM | 5 NOV 2024
5.5 (3.74%)

Bharat Electronics share price

285.35
03:29 PM | 5 NOV 2024
1.3 (0.46%)

Bank Of Baroda share price

257.95
03:29 PM | 5 NOV 2024
5.2 (2.06%)

State Bank Of India share price

848.00
03:29 PM | 5 NOV 2024
18.15 (2.19%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Deepak Fertilisers & Petrochemicals Corporation share price

1,310.00
03:29 PM | 5 NOV 2024
33.3 (2.61%)

National Aluminium Company share price

234.65
03:29 PM | 5 NOV 2024
3.85 (1.67%)

Gillette India share price

10,519.05
03:29 PM | 5 NOV 2024
116.1 (1.12%)

Suven Pharmaceuticals share price

1,332.50
03:29 PM | 5 NOV 2024
12.85 (0.97%)
More from 52 Week High

Rainbow Childrens Medicare share price

1,544.50
03:29 PM | 5 NOV 2024
-86.2 (-5.29%)

PB Fintech share price

1,627.00
03:29 PM | 5 NOV 2024
-85.75 (-5.01%)

Torrent Power share price

1,708.00
03:29 PM | 5 NOV 2024
-88.75 (-4.94%)

Tube Investments Of India share price

4,169.00
03:29 PM | 5 NOV 2024
-191.1 (-4.38%)
More from Top Losers

HFCL share price

127.80
03:29 PM | 5 NOV 2024
8.45 (7.08%)

Jindal Saw share price

326.10
03:29 PM | 5 NOV 2024
16.15 (5.21%)

Oil India share price

496.00
03:29 PM | 5 NOV 2024
23.55 (4.98%)

Himadri Speciality Chemical share price

587.95
03:29 PM | 5 NOV 2024
27.65 (4.93%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    80,255.00-160.00
    Chennai
    80,261.00-160.00
    Delhi
    80,413.00-160.00
    Kolkata
    80,265.00-160.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.92/L0.00
    Chennai
    100.80/L-0.23
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts