LIC Housing Finance Ltd. share price target

Disbursements witnessed a growth of 15% YoY while Net Interest Income de- grew by ~3.5%YoY on account of higher interest expenses (11%YoY). PAT growth remained flat (~3%) as Net Interest Margin was down by 48bps at 2.49% YoY in Q4FY18. Asset quality deteriorated with a higher GNPA of 0.78% (+35bps YoY) and NNPA of 0.43% (+29bps YoY). ROE de grew by 200bps while ROA remained flat on account of lower provisioning. We expect loan growth to sustain due to strong mix of salaried class in the clientele and factor a loan-book growth of 16% CAGR over FY18-20E. We factor NII and earnings to grow at a CAGR of 15% and 17% respectively for FY 18-20E....

Operating Income grew by 4.36% to Rs. 3900.95 Cr in Q4FY18 when compared to the previous quarter. LIC Housing Finance Ltd Q4FY18 results Comment

Despite 19% growth in disbursement for the full year, loan growth is lower at 15% on account of higher repayments/pre-payments/shifting to competitors. Management has guided for a modest loan growth of 15% for FY19. Higher loan growth of 31% in LAP and 47% in developer loans, whereas growth in pure home loan modest at 11%. Post RERA implementation, management is targeting higher growth in developer loan segment....

Maintain BUY with a TP of Rs 636. (2x Mar-20 ABV of Rs 318) In a seasonally strong quarter, LICHFs results were largely uninspiring. Sequential NIM expansion was curtailed (16bps vs. and average of 23bps over FY12-17) despite a 34bps drop in CoF and rising share of higher yielding project loans (4.9% vs 4.0% QoQ) and LAP (14.3% vs. 13.2% QoQ).

LIC Housing Finance (LICHF) reported a marginal 2% YoY increase in PAT toINR5.4b (5% beat), helped by better than expected loan growth and lower credit costs. Loan book growth remained in line with past trends at 15-16% YoY, with core home loans growing at 11% YoY. Loan mix continued to shift towards non-core loans, with the share of LAP and developer loans increasing 180bpQoQ to 19.2%. Disbursements grew 15% YoY to INR174b, driven by 17% YoY increase in home loan disbursements to INR110b.

ICICI Securities Ltd | Retail Equity Research PAT at | 539 crore (up 2% YoY) was in line but mainly aided by lower than expected provisions & high fee income (up 63% YoY) On the operational front, the performance was muted with PPP declining 3% YoY to | 867 crore. This is owing to 3.5% YoY decline in NII to | 1004 crore and rise in operating expenses (CIR was at 20.5%, higher than seen in last several quarters) Headline asset quality witnessed improvement QoQ, which is also a...

LIC Housing Finance (LICHF) net profit was up 2% YoY (4% higher than JMFe) due to higher than expected margins and lower credit costs. Key Highlights i) Disbursement grew by 15% YoY while Loan book grew 15% YoY supported by non-core segments - LAP (31% YoY) and developer segment (47% YoY) while individual segment remained muted 11% YoY. Proportion of non-core segments has now increased to 19.2% vs. 16.4% YoY ii) Calc. spreads declined 45bps YoY to 1.50% driven by 78bps YoY decline in yields and higher slippages during the year. To tackle the decline in yields, company has now increased its lending rates by 20bps in April 2018 iii) Company has increased its processing fees across...

Q3FY18 PAT at Rs 4.9 bn (down 1.6% YoY) was largely in line with our estimate. Loan growth remained stable at 15.4% with individual loan (ex-LAP) growth at 10.8% (highest in 8 quarters). Disbursements growth was strong at 27% YoY on 32% YoY growth in individual disbursements.

Outlook: LICHF has performed decently on loan growth, however margin compression and deterioration in asset quality has impacted profitability. Composition of loan book in home loan segment has reduced to 83% attributable to sharper growth in LAP and developer loans. Management intends to retain home loan book composition above 80%. Spreads are compressed primarily on account of slower reprising of its borrowings as bulk of it is through NCD's which are fixed rate in nature. As a result, despite being triple AAA rated, its cost of funds is relatively on the higher side. Though asset quality on home loan and LAP segment is fairly robust,...

Maintain BUY with TP of Rs 655. (2.1x Dec-19 ABV) LICHFs 3Q results came in below expectations, owing to pressure on yields, as NIM further declined 5bps QoQ (42bps YoY) to 2.33%. Disbursement grew strongly at 27.1% YoY to Rs 112.3bn. The loan book growth was at 3.1%/15.4% QoQ/YoY. GNPAs shot up QoQ from 0.8% to 0.87%, owing to higher NPAs in the developers book.