Breakout stock: GIC RE share price up 12%, hits record high on heavy volume

Breakout stocks: The strong surge in GIC RE share came as the stock witnessed a multi-year trendline breakout roughly above Rs 400 level

Breakout stocks: General Insurance Corporation of India (GIC-RE) share price soared as much as 11.8 per cent to hit an all-time high of Rs 494.65 per share on the BSE on Friday, December 20, 2024.

 

GIC RE share price was ruling 11 per cent higher at Rs 490.7 per share at 1:17 PM on the exchange, even as the benchmark BSE Sensex index was down 778 points (0.98 per cent) at 78,441 level.

 

The strong surge in GIC RE share came as the stock witnessed a multi-year trendline breakout roughly above Rs 400 level, supported by volumes. Yearly charts, now, suggest an immediate resistance at Rs 501 per share.  

 

A combined 21.98 million shares have changed hands on the GIC RE counter, thus far in trades, on the BSE and the NSE.

 

General Insurance Corporation of India (GIC RE) is the leader in the Indian reinsurance market. The Corporation provides reinsurance across many key business lines including property, motor, agriculture, marine, engineering, aviation, and health.

 

Thus far in calendar year 2024, GIC RE share price has surged 60.3 per cent on the BSE as against a 9.6 per cent rise in the benchmark Sensex index.

 

From its 52-week low of Rs 280.25, which it hit on April 15, 2024, the stock has soared 76.34 per cent.

 

GIC RE has a market capitalization of Rs 85,220 crore at the time of writing of this report.

 

The stock has a price-to-earnings (P/E) multiple of 11.66x and a dividend yield of 2.07 per cent.

 

Financially, GIC RE reported Gross Premium Income of Rs 20,819.16 crore for the half year ended on September 30, 2024 (H1FY25), as compared to Rs 19,679.85 crore in H1FY24.

 

Its profit after tax increased to Rs 2,897.12 crore for the period, relative to Rs 2,336.87 crore for the corresponding period last year.

 

Combined Ratio, however, fell to 111.64 per cent for the half year ended September 30, as against 116.98 per cent for H1FY24.

 

The combined ratio (CR) is a performance indicator used by insurance companies to measure their profitability and financial health.

 

Adjusted Combined Ratio, meanwhile, was 88.86 per cent for H1FY25 as against 93.63 per cent for H1FY24.

 

Earlier, in October, AM Best credit rating agency upgraded the Financial Strength Rating of GIC RE to ‘A-‘ (Excellent) from ‘B++’ (Good) and the Long-Term Issuer Credit Rating to ‘a-‘ (Excellent) from ‘bbb+’ (Good) of the Corporation.

 

Further AM Best also revised the Credit Rating outlook to ‘Stable’ from ‘Positive’.

 

“The ratings reflect the Corporation’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management,” the agency had said.