LIC Housing Finance - Q1FY21 Company Update - ICICI Securities

LIC Housing Finance reported steady Q1FY21 results wherein loan growth was sluggish whereas lower provisions and lower tax rate led to healthy PAT growth. Moratorium book was relatively lower compared to peers. As on June 2020, ~25% of the total loan book was under moratorium while individual loans under moratorium formed 16% of respective portfolio. Moratorium for LAP and developer loans was at 37% and 77%, respectively.

Valuation & Outlook

Business growth is seen remaining gradual with a focus on opportunities in Tier II, III cities. Slightly aggressive pricing is seen offsetting benefit of lower funding cost thereby keeping margins steady. Given the current scenario, strong parentage, housing finance business (which is better placed) and higher proportion of individual loans provide comfort. However, higher restructuring and thereby regulatory provisions remain a near term risk. We expect earnings growth at 12% CAGR in FY20-22E to Rs. 2961 crore. Valuing the business at ~1x FY22E ABV, we revise our target price to Rs. 345/share. We have a BUY recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_LICHF_Q1FY21.pdf

Shares of LIC HOUSING FINANCE LTD. was last trading in BSE at Rs.298 as compared to the previous close of Rs. 299. The total number of shares traded during the day was 380608 in over 5736 trades.

The stock hit an intraday high of Rs. 305.5 and intraday low of 296.05. The net turnover during the day was Rs. 114141989.

Source : Equity Bulls

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