On 5th October 2024, LIC’s share price stood at ₹971, reflecting a 0.39% increase by 2:40 PM. The stock opened at ₹973 and reached a high of ₹982.80 before touching a low of ₹955.70. With a market capitalization of ₹6,14,252.15 Cr, LIC remains one of the most prominent companies in India’s financial landscape. Investors are keen to know whether this modest rise signals a buying opportunity or if it’s time to sell.
LIC Share in Today’s Market
- Current Price: ₹971 (up 0.39%)
- Market Cap: ₹6,14,252.15 Cr
- Volume: 1,345,161 shares
- 52-Week High: ₹1,222
- 52-Week Low: ₹597.35
- VWAP: ₹971.46
- P/E Ratio: 14.77
- Beta: 1.42 (indicating moderate volatility)
Company Financial Overview
LIC remains a giant in the insurance sector, backed by strong financial fundamentals. Here’s a snapshot of key data points:
- Enterprise Value: ₹5,79,731.10 Cr
- P/B Ratio: 6.64
- Dividend Yield: 1.03%
- Book Value (TTM): ₹146.29
- Cash Reserves: ₹34,521.05 Cr
- Zero Debt: A major positive for LIC
- Promoter Holding: 96.5%
- EPS (TTM): ₹65.76
- Sales Growth: 11.02%
- Profit Growth: 11.75%
- ROE: 63.61%
- ROCE: 63.79%
LIC’s robust financials are a testament to its strong market presence. The company’s zero debt, coupled with impressive profitability metrics such as a return on equity (ROE) of 63.61% and return on capital employed (ROCE) of 63.79%, makes it an attractive pick for long-term investors.
Company Pros and Cons
Pros:
- Strong cash reserves of ₹34,521.05 Cr and zero debt.
- Consistent profit growth of 11.75%.
- Dominant market share with a 96.5% promoter holding.
- High return ratios: ROE and ROCE both above 60%.
Cons:
- The stock has high volatility, indicated by a beta of 1.42.
- Dividend yield of 1.03% is modest, especially for income-focused investors.
- P/B ratio of 6.64 suggests the stock might be overvalued compared to its book value.
India Hood Recommendation
- For Long-term Investors: LIC’s strong financials and dominance in the insurance sector make it a good long-term investment. The high promoter holding and consistent growth in both sales and profits indicate a stable outlook. Investors can consider buying on dips, especially if the stock moves closer to its 52-week low.
- For Short-term Traders: With the stock currently trading closer to its lower range, short-term traders may find opportunities to capitalize on minor fluctuations. However, given the moderate volatility (Beta of 1.42), caution is advised.
- For Dividend Seekers: With a dividend yield of only 1.03%, LIC might not be the best pick for those seeking high regular income through dividends.
Conclusion
LIC’s stock has shown resilience in the market despite recent fluctuations. Its solid financials, zero debt, and strong market position make it a worthy consideration for long-term investors. However, the stock’s volatility and current valuation may deter short-term investors. As always, it’s important to assess your own financial goals before making any decisions.
Disclaimer
The information provided in this article is for educational and informational purposes only. Investors are advised to conduct their own research or consult a financial advisor before making any investment decisions.
