LIC Housing Finance stocks: Buy LIC Housing Finance, target price Rs 435: Sharekhan by BNP Paribas

Sharekhan by BNP Paribas has buy call on LIC Housing Finance with a target price of Rs 435.The current market price of LIC Housing Finance is Rs 369.35.

LIC Housing Finance, incorporated in the year 1989, is a Large Cap company (having a market cap of Rs 20286.32 Crore) operating in NBFC sector.

LIC Housing Finance key Products/Revenue Segments include Interest, Income From Financial Services and Fees & Commission Income for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 5895.94 Crore, up 15.57 % from last quarter Total Income of Rs 5101.40 Crore and up 16.09 % from last year same quarter Total Income of Rs 5078.68 Crore. Company has reported net profit after tax of Rs 461.97 Crore in latest quarter.

The company’s top management includes Mr.M R Kumar, Dr.Dharmendra Bhandari, Mr.Jagennath Jayanthi, Mr.V K Kukreja, Mr.Raj Kumar, Mr.Akshay Rout, Mr.P Koteswara Rao, Mr.Kashi Prasad Khandelwal, Mr.Ameet Patel, Mr.Ravi Krishan Takkar, Mr.Y Viswanatha Gowd, Mr.Sanjay Kumar Khemani. Company has M P Chitale & Co as its auditors. As on 31-03-2023, the company has a total of 55 Crore shares outstanding.

Investment Rationale
The brokerage believes valuations clearly factor in all the related concerns on sub-par growth in business, higher stress in the non-individual book, and below-par return ratios.

Further, it acknowledges that smaller HFCs and listed developers are reporting robust trends. Management alluded the reason of the slowdown to select cities and is confident of a bounce-back to double-digit disbursements growth. Asset-quality outlook is stable.

Restructured book is still under moratorium amounts to Rs. 750 crore that will be tested over the next two quarters; however, there are some resolutions that are expected to be completed in FY2024, which could lead to Rs. 400-500crore recovery. Thus, the company expects credit costs to remain lower from here on.

Promoter/FII Holdings
Promoters held 45.24 per cent stake in the company as of 31-Mar-2023, while FIIs owned 17.66 per cent, DIIs 24.06 per cent.

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