Prabhudas Lilladher's research report on LIC Housing Finance
LIC Housing Finance (LICHF) saw a good quarter with a positive surprise on PAT led by beat on all fronts barring loan growth, that was a miss as volumes were impacted due to third covid wave. The company guided that disbursals could grow by 15% in FY23 and builder loans could see an uptick that might contribute 5-10% to credit flow. NII was ahead due to higher NIM driven by lower funding cost. Benefit of borrowing cost could continue, that might cushion NIM considering that fixed rate liabilities contribute 53% and interest rates could harden. Asset quality improved with GNPA/NNPA reducing QoQ by 40bps each led by better recoveries.
LICHF performed well in H2FY22 while valuation at 0.8x is attractive. We maintain multiple at 1.0x FY24 ABV but slightly raise TP to Rs435. Upgrade from ACCUMULATE to BUY.
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