jp morgan overweight rating: JP Morgan maintains overweight rating on LIC post Q4 results, sees 29% upside

JP Morgan, the global brokerage firm, has upheld its ‘Overweight’ rating on LIC following the announcement of its Q4 results at a target price of Rs 1,340. This projection suggests a potential increase of 29% from the previous day’s closing price of Rs 1,035.8 per share.

In its report, JP Morgan highlighted LIC’s strong performance in Q4, particularly noting its impressive earnings and surpassing New Business Value (NBV) expectations.

The global investment bank commends LIC’s strategic focus on growth over profitability, with market observers acknowledging the company’s expanding market share as a significant driver for its stock performance.

Furthermore, JP Morgan emphasised, “The stock appears undervalued, with ample room for robust business growth.”

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Meanwhile, India’s leading life insurer disclosed a net profit of Rs 13,782 crore for the quarter ending March 31, 2024, marking a 4.5% rise compared to Rs 13,191 crore reported in the corresponding period of the previous fiscal year.

Maintaining its dominance in the Indian life insurance sector, LIC commands an impressive 58.87% market share in First Year Premium Income (FYPI). Notably, for the fiscal year ending March 31, 2024, LIC’s market share reached 38.44% in individual business and 72.30% in group business.

The Total Premium Income for the fiscal year ending March 31, 2024, amounted to Rs 4,75,070 crore, marginally higher than the Rs 4,74,005 crore reported in the previous fiscal year. Meanwhile, the Total Individual Business Premium for the same period increased to Rs 3,03,768 crore from Rs 2,92,763 crore in the corresponding period of the previous year.

LIC’s Value of New Business (VNB) for the fiscal year ending March 31, 2024, stood at Rs 9,583 crore, exhibiting a growth of 4.66% compared to Rs 9,156 crore reported in the previous fiscal year. Moreover, the net VNB margin for the fiscal year ending March 31, 2024, saw a notable increase of 60 basis points to 16.80% from 16.20% in the previous fiscal year.

At 11:21 am, the scrip was trading 0.5% lower at Rs 1,030 on BSE. The stock has rallied 52.8% in the last six months, compared to a 14.15% gain in the Sensex.

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