Hold LIC Housing Finance; target of Rs 410: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on LIC Housing Finance with a target price of Rs 410 in its research report dated May 17, 2023.

Broker Research

May 17, 2023 / 20:59 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on LIC Housing Finance

We downgrade LICHF to ‘HOLD’ from Accumulate given recurring one-time aberrations which mar earnings quality, although sovereign rating (favorable cost of funds) and attractive valuation at 0.8x are key strengths. LICHF saw another weak quarter; while NII beat PLe by 20% led by better NIM, disbursals were softer despite Q4 being seasonally strong. Credit flow was impacted as disbursals in individual segment declined by 21% QoQ due to interest rate hikes and muted demand (also in affordable housing). Q4 saw a jump in project finance disbursals, of which 60% was to existing customers.

Outlook

Asset quality was weak; GNPA declined by 34bps to 4.4% driven by higher writeoffs resulting in PCR falling by 6.6% QoQ to ~44%. Stage-2 assets rose by 133bps QoQ to 5.3% led by rise in bounce rates given surge in EMIs. Rolling forward to Mar’25 ABV, we maintain our multiple at 0.9x and TP at Rs410.

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