Quote on LIC Housing Finance By Jyoti Roy, Angel Broking Ltd
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Below are Quote on LIC Housing Finance By Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd
LIC Housing finance is one of India’s largest housing finance companies with a loan book of over Rs. 2.1lakh crore at the end of Q3FY21 with a strong presence across all geographies. Stress on the developers loan book which accounts for ~`7% of the company's loan book had led to a de-rating of the stocks as it has raised concerns over asset quality issues. The management has highlighted that 2-3 large developer books will get resolved in Q4FY21. The company has posted a good set of numbers for Q3FY21 as individual home disbursements as up by 30.7% YoY. Incremental cost of funding for the company stood at 5.25% for the quarter which should lead to improvement in spreads going forward. Management commentary was also positive on the asset quality front as they do not expect an increase in NPA by more than 1% while restructuring should not exceed 1% of the book. Strong growth in disbursements along with lowers than expected stress on asset quality should lead to further rerating for the company. We have a BUY rating on LIC Housing Finance with a target price of Rs. 570.
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