LIC Housing Finance Ltd. share price target

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...

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...