LIC Housing Finance Ltd. share price target

LIC Housing Finance’s (LICHF) erratic NIM behaviour across quarters makes it difficult to forecast its NIM trajectory with a reasonable degree of confidence.

The trends that were being monitored and watched closely in LIC Housing Finance’s (LICHF) Q1FY23 earnings were NIM trajectory, retail growth momentum and restructured pool behaviour.

LICHF reported a PAT of INR7.67b (~60% beat) in 3QFY22, up ~6% YoY, driven by an all-round beat on NII (up 25% QoQ and 14% YoY; 12% beat), opex (down 21% QoQ; 3% lower than our estimate), and lower credit costs, which declined by 44% QoQ to INR3.56b (est. INR5b). There was a one-off impact of INR1.35b on interest income in 2QFY22 due to the EIR/IRR impact on the restructured loan pool. Adjusted for this, NII was up 12% QoQ. NIM improved by ~42bp QoQ to ~2.42% in 3QFY22, while core spreads declined to 1.83% in 9M (from 1.96% in 1HFY22)....

LICHF's Q3FY22 earnings growth was healthy, led by improving business momentum. Asset quality largely stood at similar levels QoQ (stage 3 lower by 10bps QoQ to 5.04% and increased by 236 bps YoY), the o/s restructured book stood at similar levels QoQ (Rs 70 bn; ~3% of total loan book). The individual home loan NPAs stood at 2.2% (flat QoQ), developer NPAs increased to ~27% vs ~24% in Q2FY22. We believe that asset quality is still not reassuring and we would closely monitor the movement in stage 3 assets...

loan NPAs at 2.2% stood down 4bps QoQ, developer NPAs at ~24% stood stagnant with negligible resolutions during the quarter. Going forward, while a decent growth story remains intact for LICHF, asset...

LIC Housing Finance (LICHF) is one of the largest housing finance companies in India. It provides long-term finance to individuals, professionals and builders of residential flats and houses. The company has a wide distribution...