Life Insurance Corporation (LIC) shares have experienced a decline trend since their debut at Dalal Street last month. At present, shares have dropped more than 20 percent compared to the price price of RS 949.
On Tuesday, the scrip declined 3 percent to reach the lowest point of all period RS 753.35 in BSE while its market capitalization (M-CAP) slipped under the Crore RS 5 LAKH to 4,76,683 Crore RS.
The insurance giant has made a warm debut because it is registered with a 9 percent discount on the price of IPO. Even then, it became the fifth largest registered company based on market capitalization debut
Even when the broker has ranked a beneficial ranking for IPOs, many analysts now suggest that stocks may be suitable for investors with long -term views or have a higher risk appetite. They even saw further sales pressure for stock.
Ravi Singh, Vice President and Head of Research, Shareindia, said LIC could witness more sales pressure and could touch the 750-700 hospital level in the upcoming trade session.
It is recommended to get out of stocks at the current level, however, high -risk tastes investors can hold their positions and wait for the reversal of the trend, he added.
LIC shares have been tarnished by volatility since they debuted on the stock exchange. The slowdown in revenue reported by the insurance company last month did not help. Many skeptical analysts about LIC’s ability to change themselves in the modern world as projected by management, “said Sonam Srivastava, founder at Wright Research.
The company last week, in the list of inaugural income posts, reported a decline of 17.41 percent in the March quarter net profit to RS 2,409.39 Crore compared to RS 2,917.33 Crore in the same quarter last year. The net premium income reached RS 1,44,158.84 Crore, up 17.88 percent from RS 1.22,290.64 Crore in the suitable quarter last year.
Although fast moving indicators still project good growth in the current quarter, we will advise investors to remain careful, Srivastava added.
According to Santosh Meena, Head of Research, Swastika Investmart, the life insurance market that is very less served in India is still in a period of growth and is in a good position to utilize enormous growth potential.
This problem is valued at a price embedded 1.1x, which is a discount compared to domestic and global colleagues. This assessment is discounted concerns with companies such as loss of market share for private players, lower profitability & lower income & income growth Compared to private players, the lower VNB margin and short -term persistence ratio, “he said.
Although, he added that LIC has a number of competitive advantages, including strong brand values, very large agent networks, and distribution networks that should be imitated. He further told investors with a long -term view to buy this stock with current market prices and follow the Buy On Dip strategy.
Our neutral view is supported by three factors: Low VNB relative to EV, which limits the potential-boev to approach the premium-wind level, the growth of apes is lower and the prospect of margin vs. partner vs. private sector colleagues as a higher commission costs LIC and OPEX limits Scope The scope of the scope is for product and channel diversification; and volatility inherent in EV because ~ 35 percent of non-PAR assets are in equity, and there is no track record of the EV movement under the structure of new bifurcation, “he said.
Although we appreciate the front position of the LIC market and a comfortable assessment, we prefer private sector partners who have growth, better profitability, and therefore Roev’s higher prospects,” he said in his report.