General Insurance Corporation of India zooms over 15% and hits an all-time high; do you own it?

General Insurance Corporation of India is an India-based global reinsurance solutions provider, offering a wide range of services in the insurance and reinsurance industry to cater to diverse needs both domestically and internationally. Today, the company experienced a significant surge in its share price.

Share Performance

At the start of the trading day, the company’s shares opened at Rs 392.30 per share, marking a decrease compared to the previous day’s closing price of Rs 404.25 on the BSE.

Today, the company reached its highest price of Rs 449.50 each since 2017 and entered the blue-sky zone, setting a new all-time high. The intraday range oscillated between Rs 467 and Rs 392.30. Presently, the stock is trading at Rs 458.05 apiece, showcasing a significant 13.31% surge from the previous day’s close. The current market capitalisation stands at Rs 80,465 crore.

Furthermore, the stock has delivered impressive returns, with a 48% increase in the last month and a remarkable 101% surge in the past three months. During the COVID-19 downturn, the stock hit an all-time low of Rs 81.50 per share, experiencing a remarkable growth of over 5.5 times from that level. Following is the monthly chart of the stock.

Financial Performance

During the December quarter of FY24, the company reported a revenue of Rs 10,851 crore, reflecting a decline of 3.53% YoY compared to the Rs 11,249 crore reported in the same quarter last year. The operating profit stood at Rs 1,446 crore, indicating a growth of 47% YoY from Rs 981 crore in the same period. Furthermore, the company’s net profit experienced a 26.7% increase, rising from Rs 1,199 crore to Rs 1,518 crore during the recent quarter.

The company’s Return on Capital Employed (ROCE) and Return on Equity (ROE) are at 20.6% and 16.8%, respectively. Meanwhile, the stock is trading at a Price-to-Earnings (PE) ratio of 12.4 times in the market.

FIIs and DIIs Increase Stake

During the third quarter of FY24, both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) increased their ownership stakes in the company, with FIIs going from 0.86% to 0.95%, and DIIs increasing from 11.02% to 11.11%. The promoter, who is the President of India, holds the majority with 85.78%, while the remaining 2.15% stake is held by retail public investors.

Business Overview

General Insurance Corporation of India is an India-based global reinsurance solutions provider engaged in assuming all or part of the risk associated with existing insurance policies originally underwritten by other insurance carriers. The company is involved in domestic and international business operations.

In the domestic business segment, the company provides reinsurance to direct general insurance companies in the Indian market. It covers various classes of business, including fire, motor, aviation, engineering, health, agriculture, marine hull, marine cargo, and life, among others. The health portfolio mainly consists of obligatory cessions and domestic proportional business, including selective COVID-19 treaties and government mass schemes, in addition to business written by foreign branches.

Investors should keep this stock on their radar.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.