EUR 120.00 For Business Accounts Only

MOSL: Morning India (15/March/19): 1. LIC Housing Finance (Steady performance in a tough environment); 2. Power & Coal monthly (Power demand subdued, but NTPC’s PAF improves); 3. Embassy Office Parks REIT

MOrning India (15/March/19): 1. LIC Housing Finance (Steady performance in a tough environment); 2. Power & Coal monthly (Power demand subdued, but NTPC’s PAF improves); 3. Embassy Office Parks REIT

 

Today’s top research idea

LIC Housing Finance: Steady performance in a tough environment; Liquidity position well managed; Balance transfer pressure softens

• Our strategist recently increased the weightage of LICHF in our model portfolio. In our view, after a span of two years, the business environment is turning favorable for LICHF. With liquidity tightening, we expect players with stronger parentage to disproportionately benefit because of (a) larger access to capital and (b) lesser competition from lower-rated peers. Hence, LICHF sailed through the past quarter with ease, raising INR200b from NCDs, INR90b from CPs and INR10b from deposits.
• The company has hiked its PLR five times in the past nine months, cumulating to 70bp. We believe this should largely offset the rise in cost of funds. At CMP, the stock trades at 1.4x FY20 BVPS - this is close to its decadal low of 1.1x. Maintain Buy with a target price of INR600 (1.5x Dec 2020E BVPS).

Piping hot news

Brookfield to acquire Mukesh Ambani’s loss-making pipeline for Rs13,000 crore

Brookfield on Thursday announced it is buying the loss-making East West Pipeline Ltd (EWPL), earlier known as Reliance Gas Transportation Infrastructure Ltd, for an enterprise valuation of Rs 13,000 crore ($2 billion) from Mukesh Ambani, chairman of Reliance Industries.  This will be the first time a private pipeline is India is being monetised. It's also the first time Reliance, India's largest private sector company.