Stock Tips: Brokerage firm CLSA has selected specific stocks from the insurance sector for the year 2022, which can give great returns of up to 45 percent to the investors.
Stock Tips: Analysts at CLSA say that private insurers have registered annual premium equal (APE) growth of 20% in the year 2021, making it a good year for them. However, the performance of the stock market for some listed companies was not good due to high valuations. The brokerage firm believes that in the year 2022, there are better prospects for the listed private insurance companies. CLSA has selected SBI Life Insurance Company as the top pick in this sector. Experts have expressed hope of good growth in these stocks in their latest recommendation. Let us know how strong they are in terms of returns.
SBI Life Insurance: Buy
Target price: Rs 1,800
So far this year, the share price of SBI Life Insurance Company has risen by 2.16% and is trading at Rs 1,237.75 per share. In 2021, the stock gained over 33%. CLSA said, “We expect the strongest VNB growth in FY21-24CL. In the long run, it has the lowest cost ratio and one of the strongest distributions.” SBI Life has been selected by CLSA as the top pick among private insurance companies. The brokerage firm has fixed a target price of Rs 1800 for this. The company’s shares are expected to rally 45.51% to reach the target price.
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Max Financial Services: Buy
Target: Rs 1,350
Shares of Max Financial Services have fallen more than 3.5% so far this year. In 2021, Max Financial had given a strong performance and the stock had gained over 40%. CLSA analysts believe distribution risk is addressed, and Max Life continues to grow with best-in-class core returns at embedded value. He said that after the slowdown in the first half of the current financial year, the pace of growth is accelerating. The company’s shares are expected to rally 38% to reach the target price of Rs 1350.
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HDFC Life: Buy
Target price: Rs 815
CLSA has upgraded HDFC Life Insurance Company from ‘outperform’ rating to ‘Buy’. In 2021, HDFC Life’s shares declined 4%. Analysts believe that HDFC Life has consistently performed well, but has underperformed over the past 12 months due to closing the margin gap compared to peers. The company’s shares are expected to rally 25% to reach the target price of Rs 815.
ICICI Prudential Life Insurance Company: Buy
Target price: Rs 750
ICICI Prudential has also been upgraded to ‘BUY’ rating from the previous rating of ‘Outperform’. The brokerage firm has fixed a target price of Rs 750 for this. The company’s shares are expected to rise 31% to reach the target price.
(Article: Kshitij Bhargava)
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