LIC Share Price Gains After JPMorgan Raises Target Price

Life Insurance Corp. of India's share price was up more than 2% on Tuesday after it posted strong second quarter results and got a ratings upgrade from JPMorgan.

The brokerage has upgraded LIC's rating to 'overweight' from 'underweight', after the insurer reported a 47% year-on-year growth in the Value of New Business, surpassing JPMorgan's expectations.

It also raised its price target to Rs 1,075 per share from Rs 790, a 36% increase, reflecting confidence in LIC's ability to sustain its growth momentum, driven by a favourable shift in its product mix.

LIC's VNB for Q2 FY25 reached Rs 2,941 crore, driven by a 26% YoY growth in Annualised Premium Equivalent and a 2.6% YoY margin expansion, bringing the margin to 17.9%.

The brokerage had previously maintained an 'underweight' rating on the stock, based on concerns about margin pressure from higher product benefits. However, with the company's robust Q2 results, showing solid progress in diversification of product offerings, LIC's strategy of focusing on higher-ticket products will likely continue to pay off, according to JPMorgan.

Shares of LIC rose as much as 2.56%, the highest level since Nov. 7, before paring gains to trade 1.96% higher at Rs 936 apiece, as of 09:44 a.m. This compares to a 0.02% advance in the NSE Nifty 50.

The stock has risen 54.06% in the last 12 months. Total traded volume so far in the day stood at 2.5 times its 30-day average. The relative strength index was at 48.

Out of 20 analysts tracking the company, 15 maintain a 'buy' rating, four recommend a 'hold', and one suggests 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 24.3%.