Buy LIC Housing Finance; target of Rs 610: Sharekhan

Sharekhan's research report on LIC Housing Finance

LIC Housing Finance (LICHF) is an attractive player in the housing mortgage market, with positives such as stable margins going ahead, pick-up in business growth helped by low interest rates, stable property prices, rising affordability and the government’s push to drive demand for housing. Going forward, as corporate credit demand / capex reboot is expected to revive in FY22E, we believe will augur well for HFCs as they may see lower competition from banks. Valuations reasonable at 1.2x/1x its FY2022E and FY2023E ABVPS; we finetune our target multiple considering the business strengths and fundamentals.

Outlook

We maintain a Buy rating on the stock with a revised PT of Rs. 610.