Moneycontrol
Get App
Last Updated : May 06, 2019 05:32 PM IST | Source: Moneycontrol.com

Accumulate LIC Housing Finance; target of Rs 597: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on LIC Housing Finance with a target price of Rs 597 in its research report dated May 06, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Prabhudas Lilladher's research report on LIC Housing Finance


Healthy revenue stream (20%YoY growth) and loans (16%YoY growth) led to robust 25%YoY growth aiding improved profitability for LICHF (operating profit grew 25%YoY, PAT 17%YoY at Rs 6.9bn vs PLe: Rs5.7bn). However, asset quality deterioration in an historically somber quarter came in as a huge disappointment with absolute GNPAs jumping 127% YoY, GNPA ratio climbing 75bps to 1.53% in Q4FY19. Developer NPAs stood elevated at 9%+ but developer disbursements declined 10% YoY. Meaningful asset re-pricing 70bps in past 6 months led to expansion in reported yields at ~10.53% despite CoF climbing to 8.5% resulting into better margins at 2.5% in Q4FY19. While consolidation in smaller HFCs, increased floating rate loans and consistent non-individual loan traction augmented business momentum for company in Q4, banks' competitive rates, continued developer book concerns should restrict NIMs (2.4-2.45% FY20-21E) and keep asset quality in check (1.5% FY21E) and therefore there exists limited levers to RoA (expect 1.2% over FY21E).


Outlook


With downside risk to return ratios, reiterate Accumulate for a price target of Rs 597 (unchanged) as we value the company at 1.7x at Mar'21 PBV.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.



India Union Budget 2019: What does Finance Minister Nirmala Sitharaman have up her sleeve? Click here for top and latest Budget news, views and analyses.
First Published on May 6, 2019 05:32 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant