LIC Housing Finance Ltd. share price target

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...

Loan book for the quarter was at | 209817 crore, up 6% YoY, with major proportion of loan mix skewed towards individual loans at | 195176 crore (up 6% YoY) while developer loans grew 7.5% YoY to | 14641 crore. Asset quality deteriorated with GNPA ratio at 2.83% against 1.98% in Q1FY20 though it remained stable sequentially. NII growth remained sluggish at 3% YoY to | 1220.6 crore, on account of slower credit growth. NIMs dipped ~3 bps YoY to 2.32% on the back of lower yields. Provisioning was down 78% YoY to | 56.25 crore. Lower tax rate led to healthy PAT...

LIC Housing Finance Limited (LICHFL) reported steady results with operating performance coming largely in line with expectations (lower provisions resulted in better-than-expected profits) but asset-quality performance was not bright. Moratorium book holding fast at 25% of total book (was 25% at Q4FY2021) was a dampener since most peers have reported a reduction in the same. Of the 25% loan book under moratorium, individual home loans accounted for 16% and rest were developer segment, which is a concern. Nearly 77% of developer loan book was under moratorium. However, developer loans were at ~7% of the total book; hence,...

No exclusive COVID provisions; Mngt believes ECL provs. stand sufficient interest expenses, steep decline in operating costs and unexpected overall loans, business-wise morat numbers have not shown improvements as recoveries remain elusive. While it's COVID assessment on asset quality is uncertain, Mngt hopes of higher transition of moratorium customers to...

25 August 2020 LICHF reported 34% YoY growth in 1QFY21 PAT to INR8.2b (60% beat). The beat was driven by better-than-expected NII as well as lower credit costs. This is a key monitorable for us. This was largely driven by smaller cities (share of disbursements in the Top 7 cities declined from an average of 45% to 35%). The loan book was largely stable at INR2.1t. Note that the loan mix has been largely stable for the past six quarters. Incremental cost of funds was down ~100bp to 6.8%, in line with the rates in the economy. Overall cost of funds declined 20bp QoQ to 7.9%. Operating expenses were up 28% YoY to INR1.37b, largely driven by a 30% YoY increase in employee expenses to INR796m. However, the company did not make any large COVID-19-related provisions this quarter.

22 June 2020 LICHFs 4QFY20 PAT was down ~40% YoY to INR4.2b. Reported PAT missed our estimates by 20%, driven by lower NII, higher operating expenses and taxation expenses, partially offset by lower credit costs. In FY20, while PPoP grew 7% YoY to INR43b, PAT was largely stable at INR24b. RoA/RoE for FY20 stood at 1.2%/14%. We have cut our EPS estimates for FY21/FY22 by 10/14% to account for the slower asset growth, pressure on margins and higher credit cost. While we expect ROAs to be muted at 1-1.1%, higher leverage (~11x highest amongst NBFCs) should lead to ROEs of 11-12% over FY20-23E. The loan book grew 2% QoQ/ 8% YoY to INR2.1t. The share of builder loans has been stable QoQ and YoY at ~7%. While this was partly mitigated by lower cost of funds, spreads declined 25bp QoQ to 1.

operating costs (85%QoQ/58%YoY). While it's COVID assessment on asset quality is uncertain, yet 75% developer loans & 35% LAP fall under morat and weak collections stands worrisome. Moreover, LICHF existing asset quality stands appalling led by 17% developer NPA, 1.8% individual book NPAs and ~2% credit costs. FY20 witnessed subdued loan traction (2%CAGR) and doubling of absolute NPAs. Against this backdrop, we expect weak loan growth cycle (6-9%), imminent NIM pressures (1.4-1.7%) and elevated NPAs (3-3.5%) for FY21-22E. Our EPS estimates do not change materially as we...

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...

LIC Housing Finance Ltd saw muted growth in profit to `598 Cr vs. `597 Cr YoY on the back of increased provisioning to `396 Cr vs. `132 Cr YoY. Core operating profit grew 15% YoY on the back of moderate loan growth of 13% YoY. NIMs have improved to 2.42% vs....