LIC Housing Finance Ltd. share price target

Strong growth in NII on improved liquidity LIC Housing Finance 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 performance trajectory across fronts, over the past few qtrs points to structural weakness. Our NEUTRAL stance is premised on the continued rise in bad loans (particularly sharp rise in LICHF's core segment this qtr) accompanied by slower loan growth (as banks appear to be grabbing m-share) and possible margin stress. The dual trend of slowing growth and asset quality deterioration at LICHF persisted into 3QFY20. Maintain NEUTRAL with a TP of Rs 471 (1.25x Dec-21E ABV of Rs 377).

both on core/non-core book can further de-rate the stock further despite already trading at lowest band. While Budget may throw positive surprises possibly boosting payments from laggard borrowers, there is no quick fix for the deepened weakness in retail and high value corporate book of LICHF. Against this backdrop, we value the Co. at lower multiple of 1.1x PABV...

LIC Housing Finance 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 posted healthy operating performance for Q2FY20. Net interest income (NII) rising by 19.3% and Net interest margins (NIM) remained largely stable. However, the asset quality continues to deteriorate with gross NPA at 2.38% as compared to 1.98% during Q1FY20, largely led by rise in the developer segment NPA which has increased to 14.8% from ~11% in the previous quarter. Management is hopeful of recovery going ahead but concerns are likely to persist and remain as the key overhang on the stock. Thus,...

LIC Housing Finance Ltd (LIC Hsg) Q2FY20 results were in line with the street expectation except for asset quality. Core performance was encouraging with pre-provision operating profit growing 36% YoY aided by Non Interest Income growth of 16% and healthy Cost to Income ratio of ~11%. NIMS improved marginally to 2.42% vs. 2.35% QoQ. The same can be attributed to decline in incremental cost of funding by 20 bps QoQ. However, its...

22 October 2019 2QFY20 PBT came in at INR8.6b (10% miss) due to higher-than-expected credit costs. first time in several quarters, the share of home loans increased sequentially (+30bp to 76.5%). provisions were largely stable at 43%. Spreads increased ~5bp QoQ to 1.4%. The share of floating rate loans declined from 93% to 82% sequentially as the company introduced a fixed- to-floating rate product. Opex grew 36% YoY to INR1.4b 20% above estimates driven by a sharp increase in employee expenses and commissions paid. While operating performance of the company has been steady, the continued increase in the GNPL ratio is concerning. Individual GNPL ratio has increased from 40bp to 150bp over the past two years.

Incorporated in 1989, LIC Housing Finance Ltd is one of the largest Housing Finance Companies in India with a key objective of providing long term finance to individuals for the purchase of house. It also provides finance to persons engaged in construction business and sale of residential properties. It has 273...

Background: LIC Housing Finance (LICHF) provides housing loans to individuals and corporate bodies. The company is also engaged in the home equity space. The company is a distant second player among housing finance companies in India. LIC Housing has an established network of direct selling agents and home loan agents. Through its subsidiary, LIC Housing operates homes for senior citizens. Loans to individual including LAP forms 93.3% of the loan book with the balance coming from...

While growth in the core segment accelerated slightly, it remains contextually unimpressive. Growth driven by the riskier non-core segment (~24% vs. ~16% in FY17) has not been a positive trade off. Higher yields from the rising share of the non-core segment were negated by weakening pricing power in the core segment while asset quality has deteriorated, led by the non-core segment. Except for the spike in provisions (+58/141%), operating performance was in line, and asset quality deteriorated QoQ as per seasonal trends. Maintain NEUTRAL with a TP of Rs 554 (1.5x Jun21E ABV of Rs 370).