Prabhudas Lilladher has given Reduce recommendation for LIC Housing Finance with a target price of Rs. 387 in its research report issued on Oct 22, 2021
Prabhudas Lilladher’s research report on LIC Housing Finance
LICHF’s Q2FY22 earnings stood mixed. While low base led to both business (interest income falling 3% QoQ, loans up 2.2%QoQ) and asset quality improvement QoQ (stage 3 lower by 79bps QoQ to 5.14%), the elevated interest reversals on OTR accounts (Rs2.5bn) and one-time operating costs (actuarial impact Rs450mn) proved as a dampener. while individual Home loan NPAs at 2.2% stood down 4bps QoQ, developer NPAs at ~24% stood stagnant with negligible resolutions during the quarter.
We reiterate REDUCE rating shifting our target multiple to Sep’23E and maintain closer to 1x PABV as re-rating is clearly a function of sustenance of healthy asset quality show. Our price target now stands at Rs 387 (earlier Rs390).