3 Life Insurance Stocks Emkay Global Suggests To Buy

An analyst of Emkay Global, did a coverage report on Indian Life Insurance Industry and sees good potential gains from 3 life insurance companies if an investor invests in them. The companies are ICICI Prudential Life Insurance Company Limited, Max Financial Services Limited and SBI life Insurance Company Limited.

According to the coverage report, the Indian life insurance space showed muted growth of 10.5% on yearly basis in retail annual premium equivalent (APE) for the month of February. It was driven by growth trends between private players ( up by 18%) and LIC (down by 3%). The retail APE growth was largely driven by ticket-size growth, with overall average ticket-size for Retail Regular Premium policies growing by 32% YoY (LIC: +24%; Private: 17%).

Emkay Global explains that it expects the overall industry will show decent growth. The brokerage feels that the industry players will benefit from the Budget announcement proposed by the government of India for withdrawal of the tax exemption on Maturity proceeds of Non-ULIP policies purchased after 1 April, 2023, with aggregate annual premium above Rs 5lakh.

So especially private players would continue to witness growth driven by the strong sale of the high ticket-size policies being tax-exempt up to 31 March, 2023. While for FY24, brokerage feels that though the impact of the sale of policies entailing a >Rs5lakh-premium is estimated to be in the range of 2-15%, depending on what the Life insurers bring to their product mix which, in turn, will affect VNB margins.

However, the brokerage identified 3 companies, showing upside

Buy ICICI Prudential Life Insurance Company Limited, with a target price of Rs 510 per share
The current market price of ICICI Prudential Life Insurance Company Limited stock is Rs 393.95 per share, which is down by 0.88%, over previous day's closing price. In one year it fell by 14.28%, but in three years it was up by 9.45%.

Buy Max Financial Services Limited, with a target price of Rs 880 per share
The current market price of Max Financial Services Limited stock is Rs 676.30 per share, which is was up by 0.24%, over previous day's closing price. In one year it fell by 14.19% but in three years it was up by 52.8%

Buy SBI Life Insurance Company Limited, with a target price of Rs 1,400 per share
The current market price of SBI Life Insurance Company Limited stock is Rs 1095.70 per share, which is down by 0.17%, over previous day's closing price. In one year it grew by 4.51%, but over three years it was up by 43.88%.

Disclaimer:
The stocks have been picked from the brokerage report of Emkay Global. Greynium Information Technologies and the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.