Hold LIC Housing Finance. target Rs 572: Emkay Global Financial Services

Emkay Global Financial Services has a hold call on LIC Housing Finance Ltd. with a target price of Rs 572. The current market price of LIC Housing Finance Ltd. is Rs 493.8 Time period given by the brokerage is a year when LIC Housing Finance Ltd. price can reach the defined target.

LIC Housing Finance Ltd., incorporated in 1989, is a largecap company with a market cap of Rs 25117.08 crore.

Investment rationale by Emkay


Heightened competition in the Individual Home Loan segment could put pressure on LICHF’s growth/margins. Considering this, pure Housing Finance companies like LICHF have faced pressure in the form of higher pre-payments and margin compressions. Although being primarily wholesale funded, LICHF has gained the maximum advantage from the recent fall in yields, we continue to remain conservative due to the company’s slowing growth and increasing non-core housing book. We maintain our HOLD with a TP of Rs572, corresponding to ~1.8x P/Adj. FY20E book.