LIC Housing Finance - Strong operational performance; Retain ACCUMULATE - Emkay

Reco: ACCUMULATE
CMP: Rs 211
Target Price: Rs 260

- LIC Housing Q3FY14 NII at Rs4.6bn and net profit at Rs3.3bn - tad above estimates. Just 6bp qoq drop in spreads at 1.16%, was a positive surprise

- Loan growth driven by retail segment (+20% yoy). Retail disbursement grew 5% qoq; repayment ratio inches up marginally at 14.5% vs. average 13% for past four quarters

- Even as retail NNPAs improved (0.4% vs 0.46%), one developer loan slippage took overall NPAs higher. Recovery process started for the account, expect positive action in Q4

- Upped our earnings marginally. LICHF remains preferred bet given growth visibility, positive ALM gap, abating NPA risks and valuations at 1.3x FY15ABV. ACCUMULATE, TP Rs260.

Source : Equity Bulls

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