LIC Housing Finance Ltd. share price target

LIC Housing Finance (LICHF) is one of the largest deposit taking Housing Finance Company (NBFC HFCs) in India. It has different product verticals of LAP and Developer Loans. Given its healthy liability franchise, low cost of funds, stable return ratios and promoter backing, we believe LICHF shall emerge stronger by the end of FY22. Meaningful pent-up demand in Metros & Tier 1/2 cities...

interest costs (up 5%QoQ albeit decline in CoF), one-off employee costs (Rs1.2bn) and elevated provisioning (143bps credit costs). While second wave restricted loan book expansion (0.2%QoQ), we reckon trajectory should only remain tepid for FY22 in light of surmounting asset quality challenges. Against this backdrop, we tweak our NPA estimates to 6%/4% (earlier 5%/3.5%) but maintain growth estimates at 11%/15% over FY22-23. Consequently, our EPS estimates stand down by 16%/3% over FY22/23. Shrinkage in return profile, erratic asset quality behavior and tepid growth...

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...

profile to 14.5%RoE/1.2% RoA by FY23. Hence, despite attractive valuations we reiterate HOLD rating for LICHF. Said that, cognizant of parental support and funding benefits, we marginally tweak valuation multiple higher to 1.1x...

LICHF saw largely stable asset quality during Q3FY21 with stage 3 assets declining 11 bps QoQ to 2.68%. On a proforma basis, there was slight deterioration though, as proforma GNPA (calc) increased from ~3% to ~3.7%, as the management had indicated that ~1% of loans would have been recognised as NPA if not for standstill norms. NPA in individual category fell from 1.7% to 1.62% QoQ while in project loans it was down 30 bps QoQ to 16.22%. Collection efficiency improved from 96% to 98% QoQ. Thus, asset quality remains steady but provision buffer at ~1.3% of...

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...

LICHF's PAT was up 22% YoY (in line) to INR7.3b. While PPOP of INR11.6b was largely in line with our estimate, low credit costs of INR1.9b (v/s our estimate of INR2.8b) led to the PAT beat. Similar to peers, LICHF delivered strong loan growth in home loans, while it saw LAP and Builder disbursements similar to prior quarters. Collection efficiency improved to 98% in Dec'20....

Demand revival in real estate projects (post reduction in stamp duty by Maharashtra Government) and continuous initiatives to boost affordable housing are likely to be the key triggers for home buying. HFCs are likely to be the biggest beneficiaries and LIC Housing Finance will lead the non-banking home financers. Moreover, the company's 2QFY21 performance and management commentary acknowledge our conviction that the company is preparing for cautious and prudent growth keeping the asset quality intact. LICHF witnessed a demand revival with disbursement growing ~250% QoQ (2.2% YoY) with wholesale disbursement of 242% QoQ (80% YoY). Furthermore, the overall collection efficacy has improved to ~96% as on 2QFY21. The bank declared that ~3% of...

to 1.7% remains elevated despite 87% salaried class focus (c) developer loan NPA at 17% although 2/3 big ticket cases stand in final stages of resolution. While NIMs stood steady this quarter, the same do not stand sustainable for FY21 as balance transfer cases to rise in light of high competitive intensities. We believe FY23 should witness revival (loan growth 15%+, NIMs 2%+ and NPAs 2.5%; current estimate 3.5%). As macro tailwinds signal beginning of bottoming out of painful home finance cycle, we upgrade LICHF to HOLD and tweak valuation multiple to 0.9x PABV Sep'22 estimates arriving at price...

LIC Housing Finance Limited is one of the biggest mortgage finance company in India