Shares of Life Insurance Corporation of India (LIC), SBI Life Insurance and HDFC Life Insurance rose on Wednesday, halting their respective two-day fall. Life insurance companies took a sharp hit earlier this month after Union Budget 2023 presentation. The sector is now looking attractive after the recent plunge, an analyst said. The Budget proposed that only traditional insurance policies with an annual premium of up to Rs 5 lakh bought from FY24 onwards would be tax-exempt. Ravi Singhal, CEO of GCL Securities, said, “Life insurance space took a hit after changes in the Union Budget. The sector is looking great after the recent correction.”
Here’s what technical analysts said on the three counters:
LIC
On the earnings front, the state-owned insurer reported a multi-fold surge in net profit at Rs 6,334 crore for the quarter that ended December 31, 2022 (Q3 FY23) as against Rs 235 crore in the year-ago period as it recognised a gain due to changes in its accounting policy. LIC shares rose 0.48 per cent on Wednesday to settle at Rs 601.20 over its previous close of Rs 598.30. The stock has lost 15.29 per cent in past one month.
Osho Krishan, Senior Analyst – Technical & Derivative Research at Angel One, said “Looking at the ongoing trend, the stock seems to be in a corrective phase with nearby support of Rs 580-600-odd zone. Any breakdown below the mentioned support could disrupt the technical charts. On the flip side, a series of resistance can be seen from the Rs 660-680 zone, followed by a sturdy hurdle of Rs 720 level. Investors need to keep a close tab on the mentioned levels as any breakthrough could dictate the near-term trend in the counter.”
Jigar S Patel – Senior Manager – Technical Research Analyst at Anand Rathi Shares and Stock Brokers, said, “The counter has stabilised around Rs 600 levels, which is its crucial support for coming months. At the current juncture, a bullish bat structure has emerged on a daily scale which is looking lucrative along the daily MACD histogram losing downside momentum thus hinting towards a possible bounce in the counter. One can buy in the range of Rs 595-605 with an upside target of Rs 640 and a stop loss would be at Rs 580.”
AR Ramachandran from Tips2trades said, “LIC needs to close above the resistance of Rs 610 on the daily charts to move up to Rs 640-665 in the near term. Strong support will be at Rs 583.”
SBI Life
The private sector insurer reported a 16 per cent decline in net profit at Rs 304 crore in Q3 FY23 against Rs 364 crore in the same quarter a year ago. SBI Life today closed 1.54 per cent higher at Rs 1,180.70. The counter has slipped 9.30 per cent in the past month.
Angel One’s Krishan said, “SBI Life has entered the oversold territory. As far as levels are concerned, the 200-SMA (Simple Moving Average) is a key hurdle for the counter, placed around the Rs 1,200-1,210-odd zone and until it gets decisively surpassed, the stock is likely to remain under a corrective phase. While on the flip side, Rs 1,100-1,090 is expected to provide intermediate support in the comparable period.”
Patel from Anand Rathi said, “The counter has been trading below all key averages. At the current juncture, one needs to wait until it closes above Rs 1,200 level, which is its historical resistance. As of now wait and watch. No fresh longs are advised.”
Tips2trades’ Ramachandran said, “SBI Life looks bearish and has strong resistance at Rs 1,188 on the daily charts. A close above this level could lead to targets of Rs 1,228-1,244 in the coming weeks. Support will be at Rs 1,135.”
HDFC Life
HDFC Life reported a 15 per cent year-on-year (YoY) rise in net profit, at Rs 315 crore, for the quarter that ended December 2022. The stock today settled 1.16 per cent higher at Rs 518.85. It has declined 14.11 per cent in the last one month.
Krishan from Angel One said, “HDFC Life witnessed a strong correction post the Budget day and has tumbled to a new 52-week low zone. In the past few trading sessions, the counter has gained some traction from the lows and is currently hovering above the pivotal support of the Rs 500 zone. Technically, the stock is in an oversold region, and any decisive breach beyond the Rs 520-530-odd zone could bring momentum to the counter toward Rs 560-570 levels in the comparable period. On the contrary, Rs 500 is expected to cushion any blip, while the sacrosanct support lies around the recent lows of the Rs 470-475 zone.”
Anand Rathi’s Patel said, “At the current juncture, the stock is trading above Rs 500 levels which is its historical support. The volume was not rising along with the falling price which is an anomaly according to volume spread analysis. In other words, volume was not in sync with the price action and thus, hinting towards a possible upside in the said counter. One can buy in the range of Rs 510-520 with an upside target of Rs 555, keeping a stop loss placed at Rs 495.”
Tips2trades’ Ramachandran said, “HDFC Life needs to close above the resistance of Rs 526 on the daily charts to move up to Rs 552-580 in the near term. Strong support will be at Rs 502.”
In addition, Singhal from GCL Securities suggested a target price of Rs 777 for LIC, Rs 1,370 for SBI Life and Rs 666 for HDFC Life.
Meanwhile, Indian equity benchmarks settled higher amid a volatile session today, led by gains in technology and automobile stocks. The 30-share BSE Sensex pack rose 243 points or 0.40 per cent to trade at 61,275; while the broader NSE Nifty index moved 86 points or 0.48 per cent higher to settle at 18,016.
Also Read | Mutual funds cut stakes in Adani Enterprises, Adani Green, 3 other Adani group stocks in January. Full details
Also Read | Paytm, Zomato, Nykaa, PB Fintech: Mutual funds bought these new-age stocks this earnings season
