LIC Housing Finance - NIMs restricted; but RoAs and low risk are positive - Emkay

- LICHF Q1FY13 NII / PAT at Rs3.5bn / Rs2.27bn – below est. Reported NIM at 2.18% declined 26bps qoq and was dragged by lower share of corporate loans and higher borrowing costs

- Growth on retail front remains upbeat with individual disbursement / loan up 28%+ yoy each. Asset quality remains intact, cumulative provisions stood at Rs6.9bn or 1% of loans

- While LICHF has beaten our exp on competitive pressure, the benefit of repricing is increasingly getting restricted due to higher disbursements in the discounted category

- Though cutting our estimates driven by restricted benefits from loan repricing, LICHF remains our best bet in financials driven by strong RoA profile with limited risks of NPAs.

Source : Equity Bulls

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