Reduce LIC Housing Finance: target of Rs 387: Prabhudas Lilladher
Prabhudas Lilladher recommended reduce rating on LIC Housing Finance with a target price of Rs 387 in its research report dated October 22, 2021.
October 26, 2021 / 11:10 AM IST
Prabhudas Lilladher's research report on LIC Housing Finance
LICHF’s Q2FY22 earnings stood mixed. While low base led to both business (interest income falling 3% QoQ, loans up 2.2%QoQ) and asset quality improvement QoQ (stage 3 lower by 79bps QoQ to 5.14%), the elevated interest reversals on OTR accounts (Rs2.5bn) and one-time operating costs (actuarial impact Rs450mn) proved as a dampener. while individual Home loan NPAs at 2.2% stood down 4bps QoQ, developer NPAs at ~24% stood stagnant with negligible resolutions during the quarter.
We reiterate REDUCE rating shifting our target multiple to Sep’23E and maintain closer to 1x PABV as re-rating is clearly a function of sustenance of healthy asset quality show. Our price target now stands at Rs 387 (earlier Rs390).
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