Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the NBFC sector. The brokerage house expects LIC Housing Finance to report a 2.7 percent growth quarter-on-quarter (growth of 20.5 percent year-on-year) in net profit at Rs 388.3 crore.
Net-interest income is expected to fall by 3.8 percent quarter-on-quarter (up 23.5 percent year-on-year) to Rs 625.1 crore, according to Motilal Oswal.
Motilal Oswal's Report on LIC Housing Finance:
LICHF’s loan growth is likely to remain healthy at 18 percent YoY on the back of healthy retail segment and some uptick in developer segment.The individual loan segment is likely to grow 18.8 percent YoY and 2.4 percentQoQ, while the developer segment is expected to grow 1 percent YoY.
Share of builder loans is likely to remain below 3 percent of overall book. Following reduction is base rates by banks and rising proportion of non-retail loan book, we expect a marginal uptick of 9bp YoY in margins to 2.28 percent. During the quarter, LICHF reduced lending rates following competitive pressures.
Barring seasonal uptick, asset quality is likely to remain stable. We model provisions of INR140m. We expect net profit to grow 20.5 percent YoY to INR3.8b.
The stock trades at 2.5x FY16E and 2.1x FY17E BV.
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