Hold LIC Housing Finance - Emkay

Reco: HOLD
CMP: Rs 246
Target Price: Rs 250

Unfavorable base and shrinking spread take toll

- LICHF's Q3FY12 NII (Rs3.3bn) and APAT (Rs2.5bn) below our expectations. Lower than expected numbers driven by sharper 20bps contraction in NIMs.

- Individual disbursements at 8.4% yoy, due to unfavorable base effect. However, mgmt still confident of 20% growth in disbursement implying 27% yoy growth in Q4FY12.

- NIMs at 2.3%, down 20bps qoq (est 12bps). Provisions write back (Rs780mn) helps as RPAT grows 45%. However, PCR dips back to 51%.

- Intended QIP and teaser rate loan provisions, key upside risk to our numbers. Valuations have seen sharp run up to 2.4x/1.9x FY12E/FY13E ABV. Recommend Hold.

Source : Equity Bulls

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