LIC Housing Finance shares trade lower after 69% plunge in Q2 profit
Morgan Stanley is of the view that the profit missed consensus forecasts by 60 percent adding that weak PPoP driven by lower NII and higher expenses were the key negatives.
October 22, 2021 / 10:48 AM IST
The LIC Housing Finance share price traded lower by 6 percent intraday on October 22, a day after the company declared its September quarter results.
The mortgage lender on October 21 reported a 68.66 percent decline in its standalone profit after tax at Rs 247.86 crore in the September quarter on higher provisioning for non-performing loans. The figure stood at Rs 790.90 crore in the year-ago period.
"The profit got hit as we made extra provisioning of Rs 600 crore for non-performing loans and for One-Time Restructuring (OTR) schemes of the RBI during the quarter," LIC Housing Finance Managing Director and Chief Executive Y Viswanatha Gowd said.
Total disbursements rose 29 percent to Rs 16,110 crore as against Rs 12,443 crore, while individual home loan disbursements stood at Rs 14,330 crore compared to Rs 10,373 crore and project loans were at Rs 353 crore as against Rs 803 crore. The figures are for year-on-year basis.
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Global research firm Morgan Stanley has an underweight call on the stock with the target at Rs 375 per share, a downside of 10 percent from the current market price. It is of the view that the profit missed consensus forecasts by 60 percent, adding that weak PPoP driven by lower NII and higher expenses were the key negatives. "Positives were lower stage-2 and stage-3 ratios QoQ," it said.
The stock was trading at Rs 413.15, down Rs 27.20, or 6.18 percent, at 10:28am. It has touched an intraday high of Rs 416.00 and an intraday low of Rs 405.10.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.