Hold LIC Housing Finance: target of Rs 520: ICICI Securities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • LIC Housing Finance is shifting its focus towards self-employed and non-housing loans, such as LAP and project finance, to improve yields and support margins.
  • The company is targeting 12-14% disbursement growth in FY27, with a focus on high-yield segments.
  • Management is guiding for FY27 NIM at 2.5-2.6%, with a focus on balancing growth and margins.
  • Asset quality is expected to improve, with a focus on recoveries and a reduction in credit costs.

Thesis Validation Checklist

  • Investors should watch for disbursement growth, margin expansion, and asset quality improvement over the next 12 months to validate the thesis.
  • Key signals include the company's ability to achieve its disbursement growth targets, maintain its NIM guidance, and improve its asset quality metrics.
  • Risks to the thesis include less than double-digit AUM growth in FY27 and margins settling above the guided range.