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Shares of Life Insurance Corporation of India (LIC) surged as much as 9% to 682 apiece on the BSE in Monday's opening session, posting their best intra-day percentage gain since listing in May, after reporting a surge in profit for the second quarter ended September 2022.

National insurer LIC reported a multifold jump in net profit at 15,952 crore in Q2 from 1,434 crore a year-ago, on the back of jump in premium income and massive gains from changes in its accounting policy along with investment income.

“Increasing non-participating mix and change in surplus distribution policy are significant growth drivers of value of new business (VNB) and in turn embedded value (EV). This, against the strong growth outlook of the Indian life insurance (especially through lens of sum assured), makes LIC a strong investment proposition. Concerns on equity sensitivity to EV is overdone and the relative ease of increasing VNB margin through change in mix is under-appreciated," said ICICI Securities. The brokerage house has maintained Buy rating on LIC shares with a target price of 917 apiece.

“Long term investors should wait for the possible breakout looking at 700 levels on chart pattern. The insurance stock is expected to give strong upside movement after closing above 700 apiece levels. Currently, the stock has support at 630 but on breaching this support, LIC shares may go up to 580 levels. So, long-term investors are advised to wait for the breakout and breakdown. They should buy either at 600 apice levels keeping stop loss below 580 or above 700 levels keeping stop loss at 630 apiece levels," said Sumeet Bagadia, Executive Director at Choice Broking.

"LIC share price has given trend reversal on chart pattern in early session. The stock may go up to 700 to 720 apiece levels in near term. Those who have this stock in their portfolio are advised to hold for short term upside target of 720 keeping stop loss at 630. For fresh investors with short term view, one can buy the stock at current levels for 720 target maintaining strict stop loss at 630 apiece levels," said Anuj Gupta, Vice President — Research at IIFL Securities.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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