Reduce LIC Housing Finance; target of Rs 341: HDFC Securities

HDFC Securities' research report on LIC Housing Finance

LICHF, like most lenders, saw a sharp rise in collection efficiency, which is unsurprising. However, we expect GNPAs to rise to 3.8% in FY21E. It has received enquiries for restructuring, amounting to ~3-4% of loans. While we have reduced our LLP estimates, we continue to believe that the company is likely to see a significant rise in provisions in the near term.

Outlook

Coupled with our belief that the company would face competitive headwinds on the growth and marginsfronts, this drives our REDUCE rating (target price of Rs 341).

For all recommendations report, click here

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