LIC shares under pressure. Whats hurting the PSU insurer stock

LIC share price news: State-run life insurance giant Life Insurance Corporation's stock faced selling pressure on Tuesday, after a downgrade and a reduction in target price by JPMorgan. 

The brokerage downgraded LIC to 'neutral' from 'overweight'.

JPMorgan brought down its target for LIC to Rs 780 from Rs 840. Its latest target implies upside potential of 9.9 per cent in LIC shares.  

According to Motilal Oswal Financial Services, LIC has all the levers in place to maintain its industry-leading position and ramp up growth in the highly profitable product segments, mainly protection, non-participating savings and annuity), but changing gears for such a vast organization requires a superior and a well-thought out execution.

The brokerage finds LIC's valuation multiple of 0.6 times its estimated embedded value for the year ending March 2024 reasonable, given the company's gradual recovery in margin and
diversification in the business mix.

Motilal Oswal's target for LIC is at embedded value-based multiple of 0.8 times.

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The LIC stock has lost 19 per cent of its value in the past one year, a period in which the Nifty50 benchmark has declined 1.9 per cent.

Anil Singhvi said last week that he would declare LIC the stock of the year of the government clears the Budget Insurance Amendment Bill. His remarks followed reports that the government is likely to introduce such a Bill.

The passing of the Bill will be a gamechanger for LIC, which has a great network of clients and agents across the country, Singhvi said. 

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