LIC Housing Finance shares tank over 7% after Q4 results. What should investors do?

Shares of LIC Housing Finance tanked 7.2% to Rs 366.8 in Wednesday's intraday trade on BSE. The company reported a jump of 5.5% in its consolidated net profit, which came in at Rs 1,180.3 crore, against Rs 1,118.6 crore in the corresponding period of the previous year.

Its net interest income (NII) grew 22.1% and was Rs 1,990.3 crore for the March quarter, against Rs 1,630 crore in the year-ago period.

The revenue for LIC Housing Finance also witnessed a jump of 21.04% and came in at Rs 6,415.11 crore compared to Rs 5,299.66 crore in the corresponding quarter of last year.


The operating margin was 15.70%, the net profit margin at 12.75%, the gross non-performing assets (NPAs) were 4.41%, while net NPAs stood at 2.50%, according to an exchange filing.

The company's board also suggested a dividend of Rs 8.50 per equity share of Rs 2 each for FY23.

At 10.44 am, the stock was trading 5.8% lower at Rs 372.4 on BSE. On a year-to-date basis, the stock has declined over 12%.

Should you buy, sell or hold LIC Housing Finance's stock? Here's what analysts say:
CLSA
CLSA maintained its buy rating on LIC Housing Finance with a target price of Rs 550. The net interest margins (NIMs) expanded 50 bps QoQ to 2.9%, its highest in 24 quarters.

Strong NIM in 4QFY23 led to a PAT (net profit) beat of 27% versus estimates. Home loan disbursements remain muted but asset quality improved due to seasonality, it said.

Jefferies
Jefferies has a Buy call on LIC Housing Finance with a target price of Rs 500.

"LIC Housing Finance's 4QFY23 PAT of Rs 11.8 bn (+6% YoY) was well above our Rs 7.5 billion estimate due to stronger NII and lower provisions. It's unclear if there are one-offs, especially as exit yields rose only 33 bps QoQ. GNPA fell 34 bps QoQ to 4.4%. Credit cost fell 70 bps QoQ as LIC Housing Finance dropped stage 3 coverage, Jefferies said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the The Economic Times)