LICI - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis for LICI (Life Insurance Corporation of India)

Here’s a comprehensive breakdown based on the parameters you provided

🧠 Investment Rating

4.5 LICI demonstrates exceptional profitability, valuation attractiveness, and financial health—all strong indicators for long-term investors.

📌 Key Strengths

Valuation

P/E of 11.8 vs. Industry P/E of 73.9 → deeply undervalued.

PEG Ratio of 0.09 → strong growth potential at a low valuation.

Book Value at ₹201 vs. Current Price ₹899 → price-to-book indicates investor confidence, but not overvalued.

Profitability

ROCE: 53.5%, ROE: 46% → stellar returns on both capital and equity.

Quarterly PAT growth: 37.6% → strong profit momentum.

Financial Health

Debt to Equity: 0.00 → completely debt-free.

EPS: ₹76.4 → substantial earnings backing the valuation.

Technical Trends

RSI: 39.2 and MACD: -8.69 → near oversold territory; may suggest a rebound.

Price is close to 200 DMA (₹888) → solid long-term support level.

📥 Ideal Entry Price Zone

Look for accumulation between ₹850 – ₹890, especially on dips toward the 200 DMA. If broader market conditions remain positive, this zone offers a compelling mix of technical support and undervaluation.

💼 Already Holding? Strategy Forward

Holding Period: At least 3–5 years, to realize the full impact of low PEG and consistent growth.

Exit Strategy

If ROE/ROCE begin to decline significantly or PEG trends toward 1+, consider trimming.

Reevaluate if price breaches ₹1,200+ without corresponding earnings growth (might indicate overvaluation).

Dividend Yield (1.33%): Though not high, the yield adds to compounding returns. Holders benefit from price appreciation and modest payouts.

⚖️ Risk Check

Volume vs. Avg Volume: Slightly below 1-week average; no alarming liquidity concern.

FII/DII Activity: Marginal uptick, not a huge driver but signals institutional interest.

LICI looks like a fundamentally rock-solid candidate for long-term investment, especially at current valuations. If you’re already holding it—nicely done. If you’re scouting for entry, the upcoming months may offer attractive buying windows as the price hovers near support levels.

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