Buy LIC Housing Finance: target of Rs 610: Sharekhan

Sharekhan's research report on LIC Housing Finance

We maintain a Buy rating on the stock of LIC Housing Finance with a unchanged PT of Rs. 610. For Q4FY21, the company posted mixed results where high provisioning dented profitability, even as healthy growth on disbursements and loan growth was seen. Strong business traction was seen with strong disbursements led by individual home segment, thus aiding AUM growth. Asset quality wise the performance was sobering, with Stage 3 assets saw significant spike which impacted profitability.

Outlook

Valuations at 1.2x/1.05x its FY2022E and FY2023E ABVPS are reasonable considering its high return ratios.

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