Motilal Oswal - LIC Housing Finance Ltd (LICHSGFIN) MOSL: LIC HOUSING FINANCE (Buy)-Asset quality pressures remain

Report

Motilal Oswal

Alpesh Mehta

EUR 120.00 For Business Accounts Only

MOSL: LIC HOUSING FINANCE (Buy)-Asset quality pressures remain

LIC HOUSING FINANCE: Asset quality pressures remain

(LICHF IN, Mkt Cap USD2.7b, CMP INR373, TP INR490, 31% Upside, Buy)

2QFY20 PBT came in at INR8.6b (10% miss) due to higher-than-expected credit costs.
It was a better quarter on the business front - home loan disbursements grew 16% YoY to INR101b. LICHF scaled back in LAP and builder loans, resulting in overall disbursements declining 15% YoY to INR122b. For the first time in several quarters, the share of home loans increased sequentially (+30bp to 76.5%).
Asset quality continues to worsen - the GNPL ratio increased 40bp QoQ to 2.4%, driven by 300bp increase in builder GNPL ratio to 14.2%. Stage 3 provisions were largely stable at 43%.

23/10/2019 12 EN

Underlying

LIC Housing Finance Ltd

LIC Housing Finance provides loans for purchase, construction, repairs and renovation of houses and flats to individuals, corporate bodies, builders and co-operative housing societies. Co.'s subsidiary is engaged in the business of setting up, running and maintaining assisted living community centre and care homes for senior citizens.

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INE115A01026 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Alpesh Mehta

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MOSL: LIC HOUSING FINANCE (Buy)-Asset quality pressures remain

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