LIC Housing Finance - Q4FY13 Result Review - Angel Broking

LIC Housing Finance reported a healthy set of numbers for 4QFY2013, with net interest income growth of 20.3% yoy and earnings growth of 24.7% yoy. Key highlights from the results were sequentially improvement in NIMs (36bp) and stability witnessed on the asset quality front (Gross NPA ratio at 0.61% and Net NPA ratio at 0.36%).

NIM improved qoq; Asset quality improved: LICHF's loan book grew strongly by 23.3% yoy to Rs. 77,812cr during 4QFY2013. Loans to the individual segment grew by 25.5% yoy, while loans to the developer segment declined by 16.3% yoy. Hence, the share of developer loans declined from 3.9% in 3QFY2013 to 3.4% for 4QFY2013. The margins remained flat yoy at 2.45%, however, were higher by 36bp sequentially primarily due to the 27bp decline in cost of funds. During the quarter, the company witnessed improvement in asset quality, as gross and net NPA levels declined sequentially by 12.5% and 15.8%, respectively, on an absolute basis. Gross and Net NPA ratios, improved by 13bp and 9bp, respectively to 0.61% and 0.36%. Provision coverage ratio improved sequentially from 39.1% to 41.4%.

Outlook and valuation: At the CMP, the stock is trading at a P/ABV multiple of 1.4x FY2015E ABV. The stock rating and target price is currently under review.

Source : Equity Bulls

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