Buy LIC Housing Finance, target price Rs 447: ICICI Securities
LIC Housing Finance Ltd., incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 21166.42 Crore) operating in NBFC sector.
By ETMarkets.com | Updated:
Agencies
ICICI Securities has buy call on LIC Housing Finance with a target price of Rs 447. The current market price of LIC Housing Finance is Rs 393.5. Time period given by analyst is one year when LIC Housing Finance Ltd. price can reach defined target.
LIC Housing Finance Ltd., incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 21166.42 Crore) operating in NBFC sector.
LIC Housing Finance Ltd. key Products/Revenue Segments include Interest, Fees & Commission Income and Income From Financial Services for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 4722.93 Crore, down -2.96 % from last quarter Total Income of Rs 4867.22 Crore and down -5.31 % from last year same quarter Total Income of Rs 4987.64 Crore. Company reported net profit after tax of Rs 249.86 Crore in latest quarter.
Investment Rationale
LIC Housing Finance’s (LICHF) Q3FY22 performance once again exhibited volatility; however, this time it surprised positively. 1) Post erratic NIM movement in H1FY22 (down 60bps since Mar’21 to 2%), NIMs retraced to 2.42% thereby supporting 25% QoQ / 14% YoY NII growth. 2) This, coupled with <60bps credit cost, led to >2x QoQ / 6% YoY growth in earnings (ahead of I-Sec and consensus expectations). 3) It has reported stage-3 assets (10bps QoQ decline to 5.04%) as per Ind-AS, but has re-categorised Rs2.3bn of provisioning into stage-1 and stage-2 following RBI circular on revised NPA recognition and provisioning. Further provisioning realignment leads to cumulative coverage of 26bps on stage-1 (vs 2bps in Q2FY22), 2.95% on stage-2 (vs 19bps in Q2FY22), while coverage on stage-3 has come off from 43.3% to 39.8%. Ageing of restructured and stress pools will call for higher provisioning. On a high base and compared to recent quarters’ average, individual home loan disbursement growth of 6% and portfolio growth of 15% was below I-Sec expectations.
The brokerage retains target price of Rs447 (0.9x Sep’22 book) and, post 16% correction in past 3 months vs. 6% for SENSEX, it upgrades the stock to BUY from Add.
Promoter/FII Holdings
Promoters held 45.24 per cent stake in the company as of 31-Dec-2021, while FIIs owned 23.46 per cent, DIIs 14.92 per cent.
LIC Housing Finance Ltd., incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 21166.42 Crore) operating in NBFC sector.
LIC Housing Finance Ltd. key Products/Revenue Segments include Interest, Fees & Commission Income and Income From Financial Services for the year ending 31-Mar-2021.
Financials
For the quarter ended 30-09-2021, the company reported a Consolidated Total Income of Rs 4722.93 Crore, down -2.96 % from last quarter Total Income of Rs 4867.22 Crore and down -5.31 % from last year same quarter Total Income of Rs 4987.64 Crore. Company reported net profit after tax of Rs 249.86 Crore in latest quarter.
Investment Rationale
LIC Housing Finance’s (LICHF) Q3FY22 performance once again exhibited volatility; however, this time it surprised positively. 1) Post erratic NIM movement in H1FY22 (down 60bps since Mar’21 to 2%), NIMs retraced to 2.42% thereby supporting 25% QoQ / 14% YoY NII growth. 2) This, coupled with <60bps credit cost, led to >2x QoQ / 6% YoY growth in earnings (ahead of I-Sec and consensus expectations). 3) It has reported stage-3 assets (10bps QoQ decline to 5.04%) as per Ind-AS, but has re-categorised Rs2.3bn of provisioning into stage-1 and stage-2 following RBI circular on revised NPA recognition and provisioning. Further provisioning realignment leads to cumulative coverage of 26bps on stage-1 (vs 2bps in Q2FY22), 2.95% on stage-2 (vs 19bps in Q2FY22), while coverage on stage-3 has come off from 43.3% to 39.8%. Ageing of restructured and stress pools will call for higher provisioning. On a high base and compared to recent quarters’ average, individual home loan disbursement growth of 6% and portfolio growth of 15% was below I-Sec expectations.
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The brokerage retains target price of Rs447 (0.9x Sep’22 book) and, post 16% correction in past 3 months vs. 6% for SENSEX, it upgrades the stock to BUY from Add.
Promoter/FII Holdings
Promoters held 45.24 per cent stake in the company as of 31-Dec-2021, while FIIs owned 23.46 per cent, DIIs 14.92 per cent.
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