LIC Housing Finance share price sheds 3 percent in the early trade on June 16 a day after the company declared its Q4FY21 earnings.
The company on June 15 reported a 5 percent decline in its profit after tax to Rs 398.92 crore in the quarter ended in March 2021 due to higher provisioning for bad loans.
It had reported a profit after tax of Rs 421.43 crore in the year ago period.
For FY20-21, net profit grew by 14 percent to Rs 2,734.34 crore as against Rs 2,401.84 crore in the previous year.
During the quarter, provisions stood at Rs 1,000 crore and total disbursements were at Rs 22,362 crore in Q4 FY2021, up 97 percent as against Rs 11,323 crore in the year-ago period.
Net interest income (NII) rose by 33 percent to Rs 1,505 crore, as against Rs 1,134 crore for the same period in the previous year.
Here is what brokerages have to say about the stock and the company after the March quarter earnings:
Macquarie | Rating: Outperform | Target: Rs 600
The company sees highest ever disbursement, while NPLs sour the mood. There is a preferential allotment of Rs 2,300 crore of equity to promoter LIC and capital raise a welcome move with growth seems to be making a comeback.
CLSA | Rating: Buy | Target: Raised to Rs 700
CLSA has maintained buy on inexpensive valuations. The asset quality is a key negative surprise and preferential allotment to LIC would lower leverage to 9x from 10x.
Motilal Oswal: Rating: Buy
The company surprised positively on growth, spreads, and addressing capitalization issues in 4QFY21. However, asset quality surprised negatively.
Given its parentage, it has been able to raise debt capital at low rates, which should keep margin healthy in a highly competitive environment. The sharp pick-up in disbursements is encouraging. Valuations at 1x P/BV is attractive.
At 09:28 hrs LIC Housing Finance was quoting at Rs 509.90, down Rs 11.85, or 2.27 percent on the BSE.
The share touched a 52-week high of Rs 542.35 and a 52-week low of Rs 255 on 11 June, 2021 and 16 July, 2020, respectively.
Currently, it is trading 5.98 percent below its 52-week high and 99.96 percent above its 52-week low.
With inputs from PTIDisclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.