Citi, Emkay, and JPMorgan have recently revised their target prices and ratings for Life Insurance Corporation (LIC) following its third quarter results. Citi has lowered its target price to Rs 1,180 from Rs 1,385, while maintaining its ‘buy’ rating. Emkay has also lowered its target price to Rs 1,100 from Rs 1,150, but remains optimistic about LIC’s future growth prospects. JPMorgan, on the other hand, has raised its target price to Rs 1,115 from Rs 1,075, while maintaining an ‘overweight’ rating.
The decline in LIC’s Value of New Business (VNB) was largely driven by a 24% drop in Annualized Premium Equivalent (APE). However, all three brokerages are still positive about LIC’s future prospects. Citi and Emkay highlight the ongoing shift towards non-participating products as a key driver of future growth, while JPMorgan believes that the APE decline has bottomed out and expects a recovery in the fourth quarter and next fiscal year.
JPMorgan forecasts a 20% VNB growth in the next financial year, driven by a shift towards higher ticket segments and a favorable age mix. Emkay expects a recovery for LIC in the coming quarters driven by higher policy sales and larger ticket sizes. Citi, on the other hand, remains optimistic about LIC’s future growth prospects, despite the recent decline.
Overall, these brokerages believe that LIC’s fundamentals remain strong, and that the company is well-positioned to benefit from the ongoing shift towards non-participating products. As such, they maintain their ‘buy’, ‘add’, and ‘overweight’ ratings for the company.