LIC shares hovering near 52-week low, down 19% so far this year; should you buy, sell or hold?
Shares of Life Insurance Corporation of India (LIC) on Thursday extended their fall for the eighth consecutive session. The stock slipped 0.87 per cent to close at Rs 572.65. The counter has lost 6.96 per cent in the last eight sessions and 19.27 per cent on a year-to-date (YTD) basis. The counter has fallen sharply since its tepid market debut in the mid of last year.
At today’s closing level of Rs 572.65, LIC traded just 1.18 per cent higher from its 52-week low of Rs 566, hit on February 27 this year. That said, the stock traded 37.76 per cent lower from its one-year high of Rs 920, touched on May 17, 2022.
A total of 1.15 lakh shares changed hands today on BSE, which was slightly higher than the two-week average volume of 1.09 lakh shares. Turnover on the counter stood at Rs 6.61 crore, commanding a market capitalisation (m-cap) of Rs 3,62,200.99 crore.
Kotak Institutional Equities has assigned a ‘Buy’ call for LIC while pegging the life insurer’s stock at Rs 975 over the next 12 months.
LIC has an average target price of Rs 850.67, Trendlyne data showed, suggesting a potential upside of 48.60 per cent.
On the flip side, technical analysts remained ‘bearish’ on the counter.
Jigar S Patel, Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “The counter is making a lower top lower bottom structure, resulting in a 25 per cent cut in price. Recently it broke its crucial levels of Rs 585 which is a matter of concern. From the indicator perspective, daily RSI (Relative strength index) and DMI (Directional movement index) are hinting towards a bearish stance in coming sessions. As of now, fresh longs are not recommended.”
AR Ramachandran from Tips2trades said, “LIC looks bearish on the daily charts with strong resistance at Rs 598.20. A daily close below the support of Rs 567 could lead to a lower target of Rs 542 in the near term.”
The stock traded lower than the 5-day, 20-day, 50-day, 100-day and 200-day moving averages. The counter’s 14-day relative strength index (RSI) came at 33.36. A level below 30 is defined as oversold while a value above 70 is considered overbought.
In a separate development, LIC, in exchange filings, disclosed that it has decreased its stake in iron ore producer NMDC to 11.690 per cent from previous 13.699 per cent and in material handling equipment manufacturer TIL to 8.076 per cent from 10.199 per cent earlier. LIC is the largest life insurer in the country.
Meanwhile, Indian equity benchmarks snapped their five-day losing streak and settled with mild gains today.
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