homemarket NewsLife insurance stocks rally in trade, led by impressive surges in HDFC Life, ICICI Pur and Max Financial
Life insurance stocks rally in trade, led by impressive surges in HDFC Life, ICICI Pur and Max Financial
In the past week alone, HDFC Life has surged by 15 percent, ICICI Prudential Life by 12 percent, and Max Financial, though a late bloomer, has gained 18 percent in the last couple of days. SBI Life has also witnessed a 5 percent increase, while LIC, which has previously underperformed, has shown an impressive 8 percent growth in just seven days.
Life insurance stocks are generating a lot of excitement in the trading market, with HDFC Life leading the way by consistently reaching new highs for the past 50 to 52 weeks. As we approach June 28, the Global Insurance Awareness Day, it seems these life insurance companies are already celebrating their remarkable performance.
In the past week alone, HDFC Life has surged by 15 percent, ICICI Prudential Life by 12 percent, and Max Financial, though a late bloomer, has gained 18 percent in the last couple of days. SBI Life has also witnessed a 5 percent increase, while LIC, which has previously underperformed, has shown an impressive 8 percent growth in just seven days.
As a result of this recent surge, these stocks are now approaching their 52-week high levels. HDFC Life, in particular, has been consistently setting new 52-week highs over the past three days. SBI Life is merely 2.5 percent away from its high, ICICI Prudential Life is approximately 5 percent away, Max Financial is still about 10 percent below its peak, and LIC lags by 13 percent.
What has brought about this change? The fiscal year 2024 was initially anticipated to be weak for life insurance companies due to two main factors. Firstly, the Budget's taxation change led to a surge in advance purchases of long-term savings policies in March, creating a strong base for future growth.
Secondly, this change is expected to impact the fresh buying of these policies in FY24. However, CNBC-TV18’s interview with HDFC Life revealed a refreshing shift in this narrative. They provided a positive outlook, anticipating mid-teens growth in value of new business (VNB) and annualised premium equivalent (APE) for FY24, with margins projected to be in the 28 percent to 30 percent range. This strong commentary from HDFC Life has bolstered the entire sector, providing encouragement.
Each company has its own unique triggers for their recent performance. ICICI Prudential Life has a new Managing Director and CEO in place, while Max Financial has experienced a significant catch-up trade. LIC is conducting roadshows in Hong Kong and the UK.
Despite these individual factors, the common driver behind the rally in these stocks is the anticipation of a strong FY24.
(Edited by : Pradeep John)
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