Buy LIC Housing Finance; target of Rs 784: Edelweiss

Edelweiss' report onLIC Housing Finance

LIC Housing Finance’s (LICHF) Q4FY17 PAT, at INR5.3bn (up 18% YoY), was marginally lower than our estimate following higher provisions (1 corporate account fully provided for). The quarter’s key highlight was NIMs settling at higher level of 2.97% (up 22bps QoQ), leading to sustained NII spurt (up >26% YoY).

Outlook

While core growth momentum is moderating, NIMs settling at a higher level, along with stable asset quality, provides comfort on sustainability of RoE near 19% by FY19E. Maintain ‘BUY’.

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