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

Prabhudas Lilladher recommended accumulate rating on LIC Housing Finance with a target price of Rs 410 in its research report dated November 03, 2022.

November 03, 2022 / 08:03 PM IST
 
 
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Prabhudas Lilladher's research report on LIC Housing Finance

LICHF saw a weak quarter with earnings miss led by steep QoQ decline in NII due to one-time interest income impact of Rs2.75bn. Retail loans of Rs90bn were converted from fixed to floating although yield increase of 150bps was borne by LICHF which led to sharp NIM decline QoQ. NIM outlook for H2FY23 is much better as PLR is hiked by 115bps w.e.f. from 1st Oct’22 and NII could normalize to ~Rs15bn per quarter in H2FY23. Housing demand remains healthy indicating retail credit momentum could sustain while builder loans could uptick. Earnings remain volatile which has weighed on the stock and we trim our multiple from 1.1x to 0.9x.

Outlook

Due to cut in NII we reduce FY23/24/25 earnings by 15%/5%/3%. As we roll forward to Sep’24 ABV our TP is lowered from Rs450 to Rs410. Change rating from BUY to ACCUMULATE.

For all recommendations report, click here

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LIC Housing Finance - 03-11-2022 - prabhu

Broker Research
first published: Nov 3, 2022 08:03 pm

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