Insurance companies gain, HDFC Life, ICICI Lombard, SBI Life hit new high

Shares of HDFC Asset Management Company (AMC), HDFC Life Insurance, ICICI Lombard General Insurance Company and SBI Life Insurance Company were among 22 stocks from the S&P BSE 500 index hitting their respective all-time highs on the BSE on Tuesday.

Hindustan Unilever (HUL), Nestle India, Bata India, Berger Paints, Info Edge (India), Manappuram Finance, Siemens, Voltas and Whirlpool of India, too, hit new highs today.

Of theses, HDFC AMC, Manappuram Finance and Bata India have seen their market value more-than-doubled in the past one year. Berger Paints India, Fine Organic Industries, Siemens, SBI Life Insurance, HDFC Life Insurance, Info Edge (India), Blue Star and ICICI Lombard were up in the range of 60 per cent to 100 per cent. In comparison, the S&P BSE Sensex was up 15 per cent during the period.

Among the individual stocks, HDFC AMC has been the top gainer, up 7 per cent to Rs 3,073 on the BSE. The stock surpassed its previous high of Rs 2,975,touched on September 23, 2019. It rallied 128 per cent from the level of Rs 1,348. The share price of the company zoomed 179 per cent against its issue price of Rs 1,100 per share.

According to analysts at Nirmal Bang Securities, Indian AMC sector is another attractive platform to play the Indian financials theme since it stands to capture, and benefit from the migration of household savings and wealth from physical assets and traditional bank deposits to mutual funds.

Increasing monthly SIP run rate leads us to believe that rising individual participation is a structural trend. We expect that a significant part of business from this opportunity will accrue to the top 5 players in the industry, the brokerage firm said in sector update. However, the stock of HDFC AMC was trading above its target price of Rs 2,724 per share.

Analysts at JP Morgan remain confident on India life insurers’ strong new business value (NBV) growth outlook in the next 10 years given the low penetration.

That said, moving into 2Q20, we expect near-term softening in NBV growth rate as premium growth starts to moderate. We forecast 15-38 per cent YoY Q220 NBV growth potential for top three private life insurers. For the non-life sector, we would see relatively smaller underwriting improvement potential in the next couple of months due to competitive pricing in the motor own damage (OD) and lower auto sales volume.

The motor third party (TP) pricing hike and scale increase would be a source of mitigation for private players. In short, "we expect the sector’s price momentum will likely moderate in the near-term and we recommend to add quality names in any weakness during Q2 reporting season," the foreign brokerage firm said in sector update.

HUL was trading higher for the ninth straight day. The counter hit a new high of Rs 2,148 on Tuesday, gaining 11 per cent during the period. The fast moving consumer goods (FMCG) company reported better-than-expected Q2FY20 results.

HUL’s net profit grew 21 per cent year-on-year (YoY) to Rs 1,840 crore, while sales revenue rose 6 per cent YoY at Rs 9,708 crore relative to the corresponding quarter of the previous fiscal. EBITDA (earnings before interest, tax, depreciation and amortization) margin, too, expanded 293 basis points (bps) YoY to 24.8 per cent in Q2FY20. Benign input cost, improved product-mix, cost-saving initiatives, lower employee cost and higher operating leverage contributed to better operating performance despite higher advertising expenses.

COMPANY	LATEST	ALL TIME HIGH	PREV HIGH	PREV DATE
BAJAJ HOLDINGS	3778.80	3800.00	3799.00	11-Jun-19
BATA INDIA	1790.80	1803.25	1789.75	30-Sep-19
BERGER PAINTS	489.05	505.00	505.00	18-Oct-19
BLUE STAR	861.25	864.00	848.60	18-Oct-19
DIVI'S LAB.	1739.75	1771.70	1769.00	02-May-19
DR LAL PATHLABS	1508.50	1549.50	1475.00	23-Sep-19
FINE ORGANIC	1995.00	2030.00	1980.00	18-Oct-19
GLAXOSMITH C H L	9080.00	9111.90	8993.85	18-Oct-19
HDFC AMC	3041.20	3072.50	2975.00	23-Sep-19
HDFC LIFE INSUR.	618.55	624.00	621.90	17-Oct-19
HIND. UNILEVER	2136.20	2148.45	2115.85	18-Oct-19
ICICI LOMBARD	1283.00	1290.00	1285.35	03-Sep-19
INDRAPRASTHA GAS	374.00	383.00	381.20	18-Oct-19
INFO EDG.(INDIA)	2397.10	2450.00	2432.00	03-Jun-19
MANAPPURAM FIN.	158.75	159.45	155.00	18-Oct-19
NESTLE INDIA	14957.70	14987.20	14921.60	18-Oct-19
ORIENT ELECTRIC	180.05	182.45	177.00	03-Sep-18
RELIANCE INDS.	1422.45	1437.65	1428.00	18-Oct-19
SBI LIFE INSURAN	964.15	970.00	930.00	18-Oct-19
SIEMENS	1667.20	1694.00	1656.00	18-Oct-19
VOLTAS	702.80	713.00	704.25	23-Sep-19
WHIRLPOOL INDIA	2194.25	2202.60	2202.00	18-Oct-19