LIC is India’s largest life insurance company and 5th in the world by total premiums, as per Ditto’s report.
LIC is renowned for its financial stability and customer trust. Over the years, LIC has demonstrated consistent growth and has remained a significant player in the insurance sector. Now, let’s explore the LIC share price target by 2025.
What is the LIC Share Price Target by 2025?
The LIC share price is currently trading around INR 600-605 per share which is 33% lower than its IPO price.
Considering ICICI Securities’ expert opinions based on comprehensive market research and analysis, the projected LIC share price target for 2025 ranges from INR 1,000 to INR 1,100 per share.
You must keep in mind that setting a price target is an estimation, and conducting your own research and staying updated on market trends is essential for making informed investment decisions.
Key Factors Affecting LIC Share Price
#1. Financial Performance and Profitability
Over the past five years, LIC has showcased consistent revenue growth, averaging around 16% annually. LIC’s net income has also witnessed a steady rise, reaching INR 1,087,933 crores in the last fiscal year.
Such financial stability and profitability indicate the company’s potential for future growth, which can positively impact its share price.
#2. Market Conditions and Economic Outlook
Currently, the insurance sector is experiencing favorable growth, with a compound annual growth rate (CAGR) of 15% over the last five years.
Additionally, the Indian economy is poised for recovery, bolstering consumer confidence and demand for insurance products. These factors create a favorable environment for LIC’s growth, and you could see a rise in LIC’s share price.
#3. Regulatory Changes and Government Policies
The recent amendment in FEMA regulations allowing foreign direct investment (FDI) of up to 20% in the LIC has opened doors for increased capital inflow and potential partnerships.
Such regulatory changes can enhance LIC’s growth prospects and positively influence its share price.
#4. Competition within the Insurance Industry
While LIC currently dominates the Indian insurance market with a market share of around 67%, it faces increasing competition from private players.
Private sector life insurance companies witnessed a higher growth rate of 18% CAGR in total premiums from FY2016 to FY2021, while LIC’s growth rate stood at 9% CAGR for the same period. The reason behind this increased competition is LIC’s poor new policy growth and lesser focus on competitive plans as compared to its peers.
Increasing competition can be a major concern for LIC’s future business growth.
Analyzing LIC’s Fundamentals
Let’s explore key financial ratios and metrics that provide insights into LIC’s performance and determine its intrinsic value.
- Earnings per Share (EPS): Over the past five years, LIC has demonstrated consistent growth in EPS, averaging around INR 50. This indicates the company’s ability to generate steady earnings, which is a positive sign for investors.
- Price-to-Earnings Ratio (P/E Ratio): Currently, LIC’s P/E ratio stands at around 10, indicating that investors are willing to pay 10 times the company’s earnings for its shares. This ratio provides insights into market sentiment and expectations regarding LIC’s future growth prospects.
- Return on Equity (ROE): LIC has consistently maintained a healthy ROE of around 20% over the past few years, demonstrating its efficient utilization of shareholder funds to generate profits. A high ROE suggests that LIC is effectively managing its assets and generating value for shareholders.
- Debt-to-Equity Ratio (D/E Ratio): LIC is a Zero debt company. This signifies a prudent capital structure and lower financial risk, which is favorable for long-term investors.
LIC Stock’s Technical Analysis
In addition to fundamental analysis, technical analysis can provide valuable insights into LIC’s share price trends. Let’s explore key technical indicators that can help assess LIC’s performance:
Current Trend: Analyzing LIC’s current trend, LIC’s shares are exhibiting a mixed trend (an overall downtrend) over the last 12 months. Experts call it a price discovery phase where a newly launched stock moves up and down to reach a realistic price.
Now you can expect an uptrend from now onwards if it breaks the resistance level at 604, secondly, the market also seems bullish for the next few months which is a plus point.
Exponential Moving Average 200 (EMA200): EMA200 is a widely used indicator that helps identify long-term trends and support/resistance levels.
Currently, LIC’s share price is trading around 600, which is below the EMA 200 value of 622. This suggests a bearish trend in the short term.
However, technical analysis indicates a strong potential for a reversal and further upward movement in the near future. You can also use the technical indicators to predict the next candlestick pattern for the stock price.
Conclusion
In this comprehensive guide, we have explored LIC’s share price target for 2025 by considering factors such as financial performance, market conditions, and fundamental as well as technical analysis.
Market experts expect LIC’s target price to be in the range of Rs 1000 to Rs 1100 by 2025. However, it’s important to remember that these projections are based on analysis and are subject to market fluctuations and external factors.
You can also read about other stocks’ target prices –
- Suzlon Share Price Target
- Tata Motors Share Price Target
- Tata Power Share Price Target
- IRCTC Share Price Target
- Adani Power Shares Target Price
FAQs
While it’s difficult to predict an exact target, based on analysis and market trends, the projected range for LIC’s share price in 2025 is estimated to be between INR 1,000 to INR 1,100 per share.
Several factors can impact LIC’s share price, including its financial performance, market conditions, regulatory changes, and competition within the insurance industry.
You can evaluate LIC’s financial performance by analyzing key metrics such as earnings per share (EPS), price-to-earnings ratio (P/E ratio), return on equity (ROE), and debt-to-equity ratio (D/E ratio).
Technical analysis helps identify trends and potential reversals in LIC’s share price by considering indicators like EMA 200 and current market trends. It provides insights into the stock’s short-term movements.
LIC has the potential to capitalize on the growing insurance market in India, driven by factors such as increasing awareness, rising incomes, and regulatory reforms. Its expansion plans and market share also play a significant role.
Investing in LIC shares carries risks such as regulatory changes, economic conditions, competition, and general market volatility. It’s important to assess your risk tolerance and diversify your investment portfolio.
Estimating LIC’s share price target involves analyzing historical performance, industry outlook, financial projections, and market sentiment. It’s advisable to conduct thorough research and consider expert opinions.
No, the projected share price target serves as an estimate and should be used as a reference rather than a definitive prediction. It’s crucial to conduct your own research, seek professional advice, and consider multiple factors before making investment decisions
