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Preeti Sharma, Partner – Tax and Regulatory Services, BDO India said the Finance Minister has taken conscious efforts to make the New Tax Regime more attractive for the taxpayers. Pick your 5 favourite companies, get a daily email with all news updates on them. Do you have the nerves of steel or do you get insomniac over your investments?

SBI Life is an Indian life insurance company founded by the State Bank of India and the French financial corporation BNP Paribas Cardif. SBI owns a 55.50% stake in the company, while BNP Paribas Cardif owns 0.22%. Ltd., each with a 1.95% stake, with the remaining 12% held by public investors. SBI Life has a paid-up capital of ₹10 billion (US$130 million) and authorized capital of ₹20 billion (US$270 million). In a week where the Q4 results of Infy brought to the street pressure on the Nifty, the counter force came in by way of financial service and banking stocks which saw an up move in a falling market and damage to Nifty was contained. It was not the first time that balance was created with two sectors making moves in opposite directions.

Hot Stocks: Brokerages on Bajaj Finance, SBI Life and Maruti Suzuki

It is mostly concerned with loans, asset management, wealth management, and insurance. Up the process of claims through video calls and virtual offices will prove to be extremely effective for them in the long run. ICICI has a lower share of 5.3% in health compared to SAHI health players (26.8% share) and has scope for improvement.

The stock market debut of Life Insurance Corporation of India next month is expected to raise about $8 billion. The insurance and financial market experts believe that this major IPO could drag down the stocks of other insurers for around a year. IT companies results brought volatility with downward bias, however financial sector companies and especially insurance sector players, have seen a bounce back after their Q4 results. This could be due to the fact that after the union budget, insurance companies had seen a sharp decline and the market punished them more than required. Will there be other companies in the financial sector which could see similar bounce back.

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This is likely because of the standard deduction’s since the selling began after the LIC IPO news was seen inching forward. Bardia said this is negative for insurance — as it will impact savings products which are usually high-value and margin products . Overall a negative for insurance companies as it will impact the high-value premium policies — thus impacting overall industry GWP growth. This will not affect the tax exemption provided to the amount received on the death of person insured. It will also not affect insurance policies issued till 31st March, 2023,” said the Union Finance Minister, Nirmala Sitharaman.

In the short https://1investing.in/, we expect the markets to move higher on the back of pro growth measures announced in the budget and less fear of the government crowding out private investments due to fiscal prudence shown by the government. The market has not held up on the gains, as, again, Banks and Adani group stocks have come under pressure apart from a correction in insurance stocks due to changes in taxation laws.” Stock Brokers can accept securities as margin from clients only by way of pledge in the depository system w.e.f. September 1, 2020. Update your mobile number & email Id with your stock broker/depository participant and receive OTP directly from the depository on your email id and/or mobile number to create a pledge. Pay 20% upfront margin of the transaction early to trade in the cash market segment. Check your Securities /MF/ Bonds in the consolidated account statement issued by NSDL/CDSL every month.

For FY24, Emkay said the GoI proposed withdrawal of the tax exemption on Maturity proceeds of Non-ULIP policies purchased after 1 April 2023, with an aggregate annual premium above Rs5lakh. Against the backdrop of the Budget, the industry, especially private players, is expected to continue witnessing strong growth in Mar-23, led by the strong sale of the high ticket-size policies being tax-exempt up to 31 March 2023. In its latest report, Emkay said, the life insurance industry posted a muted Retail APE growth of 10.5% YoY for Feb-23, with the Private sector growing at 18.2% and LIC’s retail APE declining by 3%YoY over the same period.

The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. In terms of technicals, the relative strength index of LIC stands at 41.2, signaling neither the stock is overbought nor oversold. The stock is trading higher than the 5 day and 20 day moving averages but lower than 50 day, 100 day and 200 day moving averages.

In insurance business, an investor must always look out for a higher proportion of product mix which is long-tailed in nature. As a long-tailed business carries a longer settlement period which gives access to the investment float for a longer period. This will inturn lead to higher ROEs and this higher investment leverage will result in better returns. Motor TP and engineering or liability insurance are all long-tailed in nature. General insurance companies with a higher proportion to any of the above is expected to generate better returns. In fact in the last one year of volatility and bearish conditions, there has been a clear relative out performance by the banks.

Hot Stocks: Brokerages view on ICICI Prudential Life and HCL Technologies post Q4 results

We take a look at what analysts are saying for select financial service stocks. Mr. B Gopkumar, MD & CEO, Axis Securities said “An extremely well-balanced budget focussed on growth driven by capital expenditure while giving an adequate push to rural welfare and agriculture. Government borrowing is well-calibrated, and it is a significant positive. The fiscal deficit target of 5.9% indicates a considerable degree of prudence. On top of this, relief to the middle class on the income tax front is the cherry on the cake.

New Business Margin is used to measure the profitability of the insurance business. Similarly, PAT or Profit after Tax should also show continuous improvement. The rationale behind giving such a recommendation is the adequate solvency ratios, robust claim settlements, and vast agency channel being the company’s moat. Pay 20% upfront margin of the transaction value to trade in cash market segment. On April 6, BOB Capital Markets initiated coverage with a buy call to the LIC stock . Pay 20% or “var + elm” whichever is higher as upfront margin of the transaction value to trade in cash market segment.

• You can also view the stocks which form a part of the sector by clicking on the sector.
• In a week where the Q4 results of Infy brought to the street pressure on the Nifty, the counter force came in by way of financial service and banking stocks which saw an up move in a falling market and damage to Nifty was contained.
• Here’s why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.
• The breakout in price is supported by a huge surge in volume, which increases the reliability of the breakout.
• Higher investment float will in the end translate to operating profits.

Some of the risks general insurance players could face is from the lower-ticket size of two-wheeler insurance since it results in greater lapse rate post the sale of new 2Ws, which already have a mandatory insurance component. Distributors should concentrate on the higher-ticket size insurance segments. Life insurers are now allowed to sell health plans, this will also add to competition among the players.

MRF Ltd, or Madras Rubber Factory Ltd, is the most expensive share in India, with a price of ₹87,455.90. The company collaborates between HDFC, one of India’s top home finance organizations, and Abrdn, a worldwide investment firm. HDFC Ltd. and Standard Life Ltd. own 51.69% and 34.75% of HDFC Life, respectively, as of March 31, 2020. LIC also increased stakes in Adani Transmission, Adani Green and Adani Total Gas during the quarter. On the other hand, the insurer pared stakes in Adani Ports and Ambuja Cements. ​​It is not known whether the transactions were made before or after the release of the Hindenburg report.

Positive Breakout: These 7 stocks close cross above their 200 DMAs

HDFC Bank CFO Srinivasan Vaidyanathan states that there were no guidelines on whether this action had to be achieved through fresh fund infusion or purchases from the market. It’s important to research and understand the industries and companies included in each sectoral index to make informed investment decisions. BOB Capital Markets gave a ‘Buy’ tag to the company with a target price of Rs 800 indicating an upside of around 46 percent as compared to the current price levels. We collect, retain, and use your contact information for legitimate business purposes only, to contact you and to provide you information & latest updates regarding our products & services. At this reasonable valuation, they can generate new business at a fast pace.

Profit and Loss statement of an insurance company is extremely different than any other industry. Annual premium equivalent which forms the topline in life insurance players is a key parameter to observe. In simple terms, APE forms the premiums received by the companies from its various products. It usually measures the volume of new business premiums written in the course of the year. NBP is the term used for new business premium which should continuously grow for a life insurance player.

The balance sheet is well placed to tide through the crises with a solvency margin of 210%, well above regulatory requirements. Going forward, HDFC Life could emerge stronger because of its diversified product mix and well-established digital presence which will boost margins. An approval by IRDAI for a regulatory sandbox initiative to experiment on various innovative approaches will also aid HDFC Life to strengthen its product mix strategy. It is currently trading at higher valuations P/EV of 3.40x than peer average of 2.57/EV hence if you already own this stock you should continue holding it in your portfolio for the long term. As per the budget 2023, the maturity proceeds of all life insurance policies that are issued after 1st April 2023 and have an annual premium of more than Rs. 5 Lakhs will now be taxable. However, the death benefit continues to remain tax-exempt from such life insurance policies, and it is not applicable to ULIPs.

• The story has a list of banks with “sell” and “Hold “ advice on some PSU banks while others have a “buy” and “strong buy”.
• In 2016, the company became India’s first insurance company to be listed on the local stock exchanges.
• In the life insurance segment too IRDAI introduced guidelines to curb mis-selling back in FY10 which resulted in an increased proportion of non-linked products.
• Such developments come on expected lines, where Emkay has maintained overall Industry retail APE growth of 14-15% in FY23, with the private sector delivering a high-teen growth and LIC at ~10% growth.
• P/Ev and P/VNB are used as valuation multiples and India’s current average is 3.5 P/EV and 42.9 P/VNB.

Its AUM continues to be debt heavy (70% of total) which will support persistency ratios during volatile equity markets. However, there are several challenges as it has a very high proportion of ULIPs in its APE mix which could affect its VNB margins. With economy slowing and change in tax slabs, its savings segment could also take a hit. Very low presence in the digital space is a big con amidst social distancing rules. It is the compensation asked for by the insurance holder for a covered loss or policy event. Power Grid Corporation of India’s stock has potential for a 52% upside as it looks to rally after an extended consolidation phase.

Here, LIC posted more than 24% growth, while the private life insurers saw about 17% growth YoY. Established in 1956, the Life Insurance Corporation of India is an insurance company that primarily provides life insurance products including pension plans, health plans, and group insurance schemes. The assets of the corporation are managed by the executive management team.

This allowed banks to enter into corporate agency alliances with upto 3 life, 3 non-life, and 3 standalone health insurance companies. Exclusive access to banking partners was a competitive advantage for many players but this changed the competitive landscape among the industry. Morgan Stanley and JPMorgan have both maintained an overweight rating on Bajaj Finance after its March quarter results. The former predicts a target price of Rs 8,000 and the latter Rs 9,000, citing strong asset quality and growth potential. Goldman Sachs has suggested a buy rating on SBI Life Insurance, with a target price of Rs 1,510 due to the company’s robust visible new business growth.

Given the earning season has just started, moves and counter moves in different sectors are likely to continue. Indian insurance industry has been seeing a steady uptick in the premium amount collected, both in the life as well as non life segment. The premiums of Indian life insurers, from new business, stood at $81.7 billion in FY21, representing a 2.8% growth compared to the previous year. As per industry reports, India’s life insurance industry premiums are expected to reach $317 billion by FY31. Life insurance continues to be a key component of household financial savings and from FY15 the contribution of these life insurance premiums has increased by 3-5% points.

If the company can increase its business at a faster pace, then its valuations should continue to increase. Full access to our intuitive epaper – clip, save, share articles from any device; newspaper archives from 2006. Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app. The modus operandi observed is that once a client pays amount to them, huge profits are shown in his account online inducing more investment. However, they stop responding when client demands return of amount invested and profit earned.

On the other hand, SBI LIFE INSURANCE (down 0.0%) was among the top losers. On the other hand, SBI LIFE INSURANCE (down 0.0%) was the top loser.

SBI Life’s strategy is to eventually increase its proportion of protection business and decrease dependence on ULIPs (currently 45.6% of NBP) as protection helps to gain the highest margin of 100%. With a lower allocation of human resource per branch and high productivity, it is the most cost-efficient player with the lowest commission ratio of 3.6%. The company has maintained a good 13th month and 61st month persistency ratio of 85.2% & 52.5%. Further, it maintains healthy solvency margins which is one of the highest at 219% providing a strong cushion in these testing times. Currently, SBILife is trading almost at par with industry average valuations at around 3.2x P/EV which makes it a good pick for your portfolio.