Maintain 'buy' on LIC Housing Finance - TP Rs.322 - Geojit BNP Paribas Financial Services

- 3QFY13 PAT missed street's estimates on account of higher than expected project NPAs and flat NIM. Net NPA rose to 0.45% versus 0.28% in 2QFY13 and 0.12 in 3QFY12.

- The NIM was 2.1% versus 2.45% in 3QFY12 and flat qoq.

- Consolidated loan growth remained strong during 3QFY13. It went up 24% yoy and 5% qoq and was in line with estimates. The individual book increased 27% yoy and 6% qoq. The project loan book declined 20% yoy but increased 5% qoq.

- The company said its undisbursed outstanding sanctions were Rs.500 crore as on December 2012

- It has indicated that the project loan book at end-FY13 would be flattish at Rs. 3200 crore.

- Overall disbursements grew 27% y-y and 3% q-q. NPAs for project loans worsened. However, management indicated that retail loan book quality had improved. The company's QIP could be postponed to June.

- The stock is rated to 'buy' with a target price of Rs.322. Higher than expected NPA and slower loan growth are key risks to the target price.

Source : Equity Bulls

Keywords