"LIC Housing Finance (LICHF) delivered a strong set of numbers as profitability improved 36 percent YoY to Rs 311 crore, which was above our estimates owing to higher-than-expected NII growth of 29.7 percent YoY and lower credit cost. The asset quality, especially in the retail segment, witnessed some pressure that was in-line with seasonal trends. The developer segment witnessed slippages of merely ~Rs 7 crore. We have lowered our estimates by 20 percent+ for FY14E, FY15E, considering the strained economic scenario, which could impact growth along with quality. Margin improvement may be stalled owing to rise in short to medium term rates."
"We have lowered our estimates and the target multiple from 1.65x (five year average) to 1.0x as we factor in a lower loan growth, margins and incorporate higher credit cost. Accordingly, we have reduced the target price from Rs 290 to Rs 160 and recommend HOLD rating on the stock," says ICICIdirect.com research report.
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