LIC Housing Finance Share Price Rises Following Bullish Outlook From Brokerages
Both HSBC and Citi have provided favourable assessments of LIC Housing Finance, highlighting various aspects of the company's performance and future prospects.
LIC Housing Finance Ltd.'s share price traded in the green on Tuesday, rising nearly 3%, after brokerages expressed their bullish sentiment on the company. Both HSBC and Citi have provided favourable assessments of LIC Housing Finance, highlighting various aspects of the company's performance and future prospects.
LIC Housing Finance reported a net profit of Rs 1,432 crore for the third quarter of FY25, marking a 23.1% increase from Rs 1,163 crore in the same period last year. However, the net interest income (NII) fell by 4.8% to Rs 1,997.1 crore from Rs 2,097 crore in Q3 FY24
HSBC on LIC Housing Finance
HSBC has upgraded LIC Housing Finance to a "hold" rating and raised its target price to Rs 600 per share.
Market Share and Pricing Challenges: LIC Housing Finance continues to lose market share and faces pricing challenges. However, lower credit costs are mitigating the impact on earnings.
EPS Estimates and Target Price: HSBC has upgraded its EPS estimates and increased the target price to Rs 600 from Rs 550, reflecting improved asset quality and corrected valuations.
Loan Growth and Margins: The company is focusing on developing an affordable housing vertical to improve yields, although AUM growth remains a challenge.
Citi on LIC Housing Finance
Citi has maintained a "buy" rating on LIC Housing Finance with a target price of Rs 851 per share, implying a significant upside from the current levels. Citi's positive outlook is driven by the company's resilience despite near-term hurdles and growth prospects in the affordable housing segment.
Provisioning and Earnings Beat: Provisioning net write-back of Rs 40 crore drove the earnings beat. Disbursements were down 6% QoQ due to adverse events in Hyderabad and Bangalore, but these issues are expected to be resolved soon.
AUM Growth and Credit Cost: Citi is building AUM growth of 8-12% for FY25E-27E and expects modest credit cost trajectory. NIMs remained stable at 2.7% despite some pressure on yields.
Target Price and Rating: Citi has set a target price of Rs 851 due to the company's strong fundamentals and growth potential in the affordable housing sector.
LIC Housing Finance's strong earnings performance and positive outlook from major brokerages have contributed to the recent rise in its stock price.
