LIC Housing Finance Ltd. share price target

LICHF came out with a positive set of results for 3QFY2017 with the PAT growing by 19.2% yoy. While we were expecting moderation in business growth, due to demonetization, better result was possible backed by growth in non-retail segment. The core retail portfolio continues to be sluggish growing by less than 10%, however, other segments ..

PAT increased 19.2% YoY to | 499 crore, beating our estimate of | 465 crore, mainly led by higher-than-expected NII at | 915 crore NII growth stayed healthy at 22.6% YoY to | 915 crore. Margins improved 7 bps QoQ to 2.75%. Change in loan mix towards high yielding assets like loan against property & developer loans and fall in CoF have enabled a rise in margins over the past four quarters...

Guarding the positive trend in the core home loan portfolio, LICHFL has been able to fortify its individual loan book by growing at 14.7% y-o-y in the first half. Competitive products and on ground marketing activities have helped it to increase the disbursements by 13.9%. Grabbing the opportunity from the Seventh Pay Commission, it has launched products for central and state government employees at lower rates. Expansion in margins by 12 bps (2.7% vs 2.6%) in the last quarter from increase in share of LAP portfolio (9.7% in H1FY17 vs 8.8% in FY16)...

LIC Housing Finance (LICHF) is among the top five housing finance companies in India and provides housing loans to individuals and corporate bodies. The company is also engaged in the home equity space. It has an established network of direct selling agents and home loan agents. Loans to individual (including LAP) forms 97.2% of the loan book with the balance coming from project loans (loans to builders).

LIC Housing Finance (LICHF)'s 2QFY17 results remained decent with the PAT growing by 21.3% yoy. Balanced growth in retail as well as in developer portfolio helped in improving the spread, while lower cost of funds helped in NIM improvement. While the core retail portfolio continues to be sluggish growing by less than 10%, other segments l..

Back to a normalized earnings quarter after high credit cost in Q1FY17 Expectedly, LICHF's non-tax provisions normalized and declined QoQ pushing up strongly the net profit growth. The earnings were in-line with estimates with ~19%YoY growth in operating income and ~18%YoY growth in operating profit. It may be noted that loan loss provisions in...

Steady performance; strength in margin to stay PAT was up 20% YoY to | 495 crore vs. estimate of | 453 crore. It was led by lower provisions of | 30 crore vs. estimate of | 93 crore NII growth stayed healthy at 21% YoY to | 866 crore. NIM improved further by 7 bps QoQ to 2.68%. Change in loan mix towards high yielding assets like loan against property (LAP) & developer loans and fall in CoF have enabled rise in margins in the past four quarters...

LICHF's loan book grew (15%YoY, 3%QoQ) to INR 1311bn in 2QFY17. Growth in project loans was healthy at 23%YoY. Home loans to Individual showed a stable growth of 15%YoY. Consequently, the share of individual and project loans stood at 97.2% and 2.8% of the overall portfolio respectively. LAP's share in the overall portfolio has grown by 40bps...

share and almost doubled in last seven years to ~10% currently. The growth has been primarily led by the individual loan book (retail book), which accounts for 97% of the total loan book. Gradually, LICHF has reduced its developer loan book share from 10% in FY10 to 3% currently in order to maintain stable asset...

One off provisions cause Q1 profit miss; retain estimates Additional ageing provisions of Rs920mn on an already recognized corporate NPA caused LICHF's Q1FY17 provisions to balloon 2.6x YoY to Rs1.16bn causing LICHF to miss profit estimates by ~9.8%. But for the one-off provisions, LICHF's Q1FY17 provisions could have declined ~35% QoQ and ~45% YoY and the net profit could have beaten estimates by 3.5%. Nevertheless, the said NPA (under LICHF possession) is now fully provided for with management optimistic about recoveries once the recovery process culminates. In our recent initiation report on LICHF, we had expressed confidence on LICHF's asset quality while...