LIC Housing Finance - Q4 FY21 Result Update - YES Securities

(Rating: ADD, TP: Rs560, Upside: 13%)

- Traction in home loans positively surprised; denoted mkt. share gains

- Sharp expansion in NIM/Spread aided by lower incremental CoF

- Deterioration in asset quality and improved coverage drive higher credit cost

- Preferential issue to LIC will support growth

Assume coverage with ADD rating

Factoring 10% loan CAGR, steady NIM and some moderation in credit cost, we estimate a stable RoA/RoE delivery of 1.3%/13-14% over FY21-24. While valuation is undemanding at 1.1x FY23 P/ABV, the volatility in performance has been more than palatable in the past. Cognizant of improving sector prospects, we rate the stock as ADD. In our view, investment risk-reward for many of its peers is superior.

Shares of LIC HOUSING FINANCE LTD. was last trading in BSE at Rs.494.9 as compared to the previous close of Rs. 521.75. The total number of shares traded during the day was 834896 in over 18048 trades.

The stock hit an intraday high of Rs. 517 and intraday low of 492.7. The net turnover during the day was Rs. 420596754.

Source : Equity Bulls

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