JP Morgan has rated life insurance stocks as ‘overweight’, citing a recent decline in their prices and improved prospects of a growth turnaround. The brokerage said it prefers Max Financial, SBI Life, HDFC Life, ICICI Prudential and LIC in that order.
“India’s life insurance sector is turning the corner with GST exemptions driving a strong uptick in retail protection,” said JP Morgan in a client note.
Agencies
“Margins, now at trough levels, look set to recover as protection sales rise and payout structures normalise.” In the past month, these stocks have declined between 1% and 10%. The price targets imply an upside of 22%- 49% over Wednesday’s closing price.
JP Morgan said an expected rejig in insurance commission payouts could lead to a decline in sales. Still, larger insurers with brand recognition and strong distribution will likely gain market share.
Agencies
Agencies