Neutral LIC Housing Finance; target of Rs 630: Motilal Oswal

Neutral

Motilal Oswal's research report on LIC Housing Finance

LIC Housing Finance’s (LICHF) 2QFY26 PAT grew ~2% YoY to ~INR13.5b (in line). NII in 2QFY26 rose ~3% YoY to ~INR20.4b (in line). Fee and other income grew 74% YoY to INR1.4b. Opex declined ~3% YoY to INR3b (~12% lower than est.) and the cost income ratio declined ~120bp YoY to ~13.9% (PY: ~15.1% and PQ: ~13.4%). PPoP grew ~8% YoY to ~INR18.7b (in line). Reported yields declined ~20bp QoQ to 9.4%, while CoB declined ~8bp QoQ to ~7.4%. This resulted in spreads declining ~12bp QoQ to ~1.98%. NIM in 2QFY26 declined ~6bp QoQ to ~2.62%.

Outlook

We estimate a CAGR of ~7%/4% in advances/PAT over FY25-28E and RoA/RoE of 1.7%/13% by FY28. We reiterate our Neutral rating on the stock with a TP of INR630 (based on 0.7x Sep’27E BV).

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LIC Housing Finance_31102025_Motilal Oswal