Buy LIC Housing Finance, target price Rs 525: Motilal Oswal

Motilal Oswal has buy call on LIC Housing Finance with a target price of Rs 525. The current market price of LIC Housing Finance Ltd. is Rs 407.25. 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 20648.29 Crore) operating in NBFC sector.

Financials
For the quarter ended 30-06-2021, the company reported a Consolidated Total Income of Rs 4867.22 Crore, down -2.26 % from last quarter Total Income of Rs 4979.91 Crore and down -2.38 % from last year same quarter Total Income of Rs 4986.01 Crore. Company reported net profit after tax of Rs 151.07 Crore in latest quarter.


Investment Rationale
The brokerage cuts FY22E EPS estimate by ~40% to factor in higher opex (because of the one-time impact from wage revisions) and elevated credit costs. While it expects FY22E to be impacted, it estimate ~1.1%/12% RoA/RoE in FY23E, after having penciled in the likely impact of the preferential allotment of fresh equity shares to the promoter.

Promoter/FII Holdings
Promoters held 40.3 per cent stake in the company as of June 30, 2021, while FIIs held 28.8 per cent, DIIs 15.6 per cent and public and others 15.3 per cent.