For 3Q FY 2012, LIC Housing Finance (LIC HFL) posted net profit growth of 43.2% y o y to Rs.306 cr,
above our estimate mostly due reversal of excess provisions (Rs.100 cr) that the
company was carrying on its balance sheet.
LIC HFL had made the entire standard provisioning of Rs.160 cr (0.40% on Rs .40,000 cr) on individual loans in 2Q FY 2012, in spite of already providing 0.10% TO 0.15%.
Also, the company was providing more on developer loans (0.9%) than required by NHB (0.40%) due to
which the company had accumulated these extra provisions.
Net interest income (NII) of the company declined by 7.0% y o y, as high prevailing
interest rates led to higher cost of funds.
Consequently, NIM declined sequentially by 0.18% to 2.27%. Loan portfolio of the company grew by healthy 26.6% y o y to
Rs.58,707 cr. The company disbursed Rs.4,722 cr of loans during 3Q FY 2012 (96.7%
to individuals).
Gross NPA as of 3Q FY 2012 for the company stood at 0.63%
(0.67% in 3QFY2011).
At the CMP, the stock is trading at 1.9x FY2013 ABV. We recommend an
Accumulate rating on the stock with a target price of Rs.262.
Share Review by Angel Broking
above our estimate mostly due reversal of excess provisions (Rs.100 cr) that the
company was carrying on its balance sheet.
LIC HFL had made the entire standard provisioning of Rs.160 cr (0.40% on Rs .40,000 cr) on individual loans in 2Q FY 2012, in spite of already providing 0.10% TO 0.15%.
Also, the company was providing more on developer loans (0.9%) than required by NHB (0.40%) due to
which the company had accumulated these extra provisions.
Net interest income (NII) of the company declined by 7.0% y o y, as high prevailing
interest rates led to higher cost of funds.
Consequently, NIM declined sequentially by 0.18% to 2.27%. Loan portfolio of the company grew by healthy 26.6% y o y to
Rs.58,707 cr. The company disbursed Rs.4,722 cr of loans during 3Q FY 2012 (96.7%
to individuals).
Gross NPA as of 3Q FY 2012 for the company stood at 0.63%
(0.67% in 3QFY2011).
At the CMP, the stock is trading at 1.9x FY2013 ABV. We recommend an
Accumulate rating on the stock with a target price of Rs.262.
Share Review by Angel Broking
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