Neutral LIC Housing Finance; target of Rs 650: Motilal Oswal

Motilal Oswal recommended Neutral rating on LIC Housing Finance with a target price of Rs 650 in its research report dated August 04, 2025.

Broker Research

August 05, 2025 / 12:26 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on LIC Housing Finance

LIC Housing Finance’s (LICHF) 1QFY26 PAT grew ~5% YoY to ~INR13.6b (in line). NII in 1QFY26 rose ~4% YoY to ~INR20.7b (in line). Fee and other income grew 170% YoY to INR1.2b. Opex grew ~12% YoY to INR2.9b (~17% lower than est.) and the costincome ratio rose ~50bp YoY to ~13.4% (PY: ~12.9% and PQ: ~19.4%). PPoP grew ~7% YoY to ~INR18.9b (in line). Reported yields declined ~20bp QoQ to 9.6%, while CoB declined ~25bp QoQ to ~7.5%. This resulted in spreads improving ~5bp QoQ to ~2.1%. NIM contracted ~20bp QoQ to ~2.68%.

Outlook

LICHF’s valuation of ~0.7x FY27E P/BV reflects the inability of the franchise to deliver stronger loan growth. We estimate a CAGR of just ~8%/3% in advances/PAT over FY25-27 and RoA/RoE of 1.6%/13% by FY27. Reiterate our Neutral rating on the stock with a TP of INR650 (based on 0.8x Mar’27E BV).

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