LIC Housing Finance (LICHF) stands to benefit significantly from the growing demand of mortgages coupled with falling interest rates. Over the past two years, improvement in borrowing profile has led to margin expansion – we expect this to continue. Its NPA ratio is comparable to the best in the industry. Post an earnings growth of 22% in FY16, we expect this momentum to sustain and model 23% PAT CAGR over FY16-19. ROE is set to cross 20% in FY17 which would drive further re- rating. The stock trades at 2.2x FY18 P/B, a discount to peers.Buy with a TP of INR761 (3x FY18E P/B).