Sharekhan Picks 4 Insurance Sector Stocks With Buy Rating, Sees Upside Potential Up To 39%

Sharekhan has picked 4 Insurance sector stocks with a Buy rating amid In-line performance. The brokerage listed HDFC Life Insurance Company Ltd., ICICI Prudential Life Insurance Company Ltd., Max Financials Services Ltd., and ICICI Lombard General Insurance Company Ltd., in its Q4FY2023 Results Review report.

Among these 4 stocks, HDFC Life, ICICI Prudential Life, and ICICI Lombard General Insurance are large-cap stocks, while Max Financials is a midcap stock.

Insurance

Sharekan said, "For life insurers under our coverage, APE growth was robust along with strong VNB growth ahead of change in budgetary provisions, driven by strong non-par high ticket-size policies. Group protection saw healthy trends, while retail protection revived sequentially. VNB margin trajectory was mixed across players. Persistency trends were stable for all players. For General Insurers (especially for ICICIGI), GDPI growth was healthy. Underwriting losses narrowed due to improvement in the combined ratio."

Valuation

Life insurance: Growth in the non-par savings product segment is expected to slow down, as business flows would get impacted in this segment due to the Union Budget's proposal, which is expected to lower APE and VNB growth going forward. Protection and annuity would be key growth drivers going ahead.

General insurance: GDPI growth is likely to remain healthy, driven by health/motor and commercial lines. Gradual improvement in the combined ratio is expected to improve profitability going forward.

Stock Outlook - CMP, Target Price, & Potential Upside

Stocks	*CMP	Target Price	Upside (In%)
HDFC Life	Rs. 581.7	Rs. 720	22.44%
ICICI Prudential Life	Rs. 495.05	Rs. 600	21.20%
Max Financial	Rs. 686.2	Rs. 950	38.44%
ICICI Lombard General Insurance	Rs. 1215.5	Rs. 1400	15.18%

Note - *CMP as on Friday, 09 May 2023

Disclaimer - The stocks have been picked from the brokerage report of Sharekhan. Greynium Information Technologies, 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.