LIC Housing Finance share price was trading in the green on May 19 in a weak market, a day after the company declared its March quarter earnings.
The financier on May 18 reported a nearly threefold year on year jump in profit after tax (PAT) to Rs 1,118.64 crore on lower provisions and improvement in collection efficiencies.
“In the year ago period, we had to make a huge provision. But in the subsequent quarters we made adequate provisioning and so higher provisioning was not required during the quarter in review. Even our collection efficiency improved, which helped in profitability,” managing director and chief executive Y Viswanatha Gowd said.
PAT declined 16 percent to Rs 2,287.28 crore in fiscal 2022. Net interest income rose nine percent year on year to Rs 1,637 crore in the quarter under review.
Net interest margin (NIM) for the quarter stood at 2.65 percent as against 2.66 percent a year ago. The lender expects NIM to be 2.44 percent in FY23.
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At 09:55 hours, the stock was trading at Rs 363.00, up Rs 4.35 or 1.21 percent. It has touched an intraday high of Rs 364.35 and an intraday low of Rs 354.50. Trading volumes were up 17.14 percent at 161,903 shares from the five day average.
Individual home loan portfolio was up 13 percent year on year at Rs 204,230 crore as of the end of the quarter under review. The financier expects growth of 15 percent in the portfolio.
Project loan portfolio stood at Rs 12,978 crore as on 31 March 2022 as against Rs 15,956 crore on 31 March 2021.
Global research firm CLSA has maintained buy call on the stock with a target of Rs 525, an upside of over 44 percent. "Asset quality recovery continues with home loan growth healthy. Core home loan growth was also healthy with the share of lap/builder loans declining," the brokerage firm said, according to a CNBC-TV18 report.
The brokerage believes that refinance of high-cost non-convertible debentures should offset a rise in cost of bank borrowings, adding that asset quality improvement was in line with peers. It has upgraded FY23/24 PPoP estimates by 3-5 percent and PAT estimates by 8-23 percent. Return on equity is likely to be 14-15 percent, CLSA added.
Morgan Stanley on the other hand has an underweight call with a target price of Rs 330 per share. The research firm is of the view that PBT was in line and both PPOP and provisions were higher than expected.
"The key observation was slowdown in loan growth. The decline was seen in loan disbursements, unlike other lenders, especially in mortgages," Morgan Stanley added.
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