JP Morgan overweight on LIC Housing Fin; raises TP by 30%

Brokerage house JP Morgan has raised its rating on home lender LIC Housing Finance to overweight after the company posted strong Q4 numbers.

The brokerage firm believes the company has shown improvement in loan growth as well as asset quality and has raised its target price on the same from Rs 436.50 to Rs 570.

"We think loan book growth for LICHF should accelerate going into F16, driven by falling rates and improving affordability," the report says, adding that the key risk will be increased competition in the lending space.

Excerpts from the report:

- Loan book growth at 19 percent continues to outpace the system and is driven mostly by individual home loans. - Gross Non Performing Loans (GNPL) trend down to 0.46 percent. With a stabilization in developer book, asset quality shocks of the past shouldn't likely recur.