LIC Housing Finance Ltd. share price target

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.

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....

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.