Buy LIC Housing Finance, target Rs 560: IDBI Capital

IDBI Capital maintains a buy rating on LIC Housing Finance with a 12-month target price of Rs 560. The introduction of a new loan product in LAP category has boosted LICHF's earnings momentum while supporting growth, which though robust, had remained concentrated in the traditional housing finance segment.

LIC Housing Finance Ltd. (LICHF)'s loan mix had suffered adversely when its corporate loan book kept unwinding and an asset quality event made the company go slow in the non-individual space. This along with pricing competition from aggressive banks kept up the pressure on spreads.

"We expect LICHF to remain in a healthy earnings trajectory supported by a benign funding environment and strong growth in high yield LAP segment. Initiate with BUY and price target of Rs560," said the brokerage note.