LIC Housing Finance reported a 23% increase in its profit after tax for Q3FY25, reaching Rs 1,432 crore. Its net interest income NII fell short of estimates, posting Rs 1,997.1 crore, a 4.8% decline from the previous year. The share price of LIC Housing Finance today during the intraday trading session is Rs 571.50, up by 2.49%. Let’s take a look at the brokerage’s views on the company’s performance and outlook.
What do brokerages say?
HSBC sees cautious optimism despite market share loss
The brokerage firm HSBC has upgraded LIC Housing Finance to a Hold rating with a target price of Rs 600 per share. According to the brokerage firm, although the company continues to lose market share and faces pricing pressure, the lower credit cost has somewhat mitigated the earnings pressure.
As per the brokerage firm, this can be seen as a sign of improved asset quality and therefore, the firm has raised their EPS estimate. In addition to this, the brokerage firm pointed out that the stock’s current valuation has corrected considerably.
Jefferies maintains Buy call but reduces target price
The brokerage firm Jefferies has maintained a Buy call on LIC Housing Finance. However, the firm has cut its target price to Rs 700 from Rs 795 per share.
According to the brokerage house, the company’s Q3 profit was 4% ahead of estimates, due to a lower provision offsetting a slight miss in NII.
However, the brokerage noted that the company’s AUM growth was subdued, affected by state-specific challenges that impacted disbursements.
While LIC Housing Finance’s net NII remained stable QoQ, the firm remains cautious that it could face some pressure if interest rates are cut in the future. Despite this, asset quality remains stable, and the brokerage believes that the stock’s valuation seems reasonable at 0.8x FY26 book value.
Furthermore, the brokerage expects a muted EPS CAGR and RoE of 13% to 14% over FY25-27.
CITI optimistic with earnings beat despite disbursement challenges
The brokerage house CITI has a more optimistic view on LIC Housing Finance, with a Buy rating and a target price of Rs 851 per share. According to the firm, the company’s earnings were boosted by a net write-back of Rs 0.4 billion in provisions, which helped beat expectations.
Furthermore, the firm added that although disbursements were down 6% QoQ primarily due to factors in key markets like Hyderabad and Bangalore, altogether contributing to 25-30% of the company’s disbursements, the brokerage is optimistic that these issues have been addressed.
The Hyderabad issue was resolved in December, and the Bangalore situation is expected to improve in the current quarter.
LIC Housing Finance Q3FY25 performance
LIC Housing Finance reported a jump in its Q3FY25 profit, with a 23% increase in its profit after tax for the quarter ending December 31. The company earned Rs 1,432 crore, up from Rs 1,163 crore in the same period last year. Despite this profit growth, the company’s NII came in at Rs 1,997.1 crore, which was below the expected Rs 2,028 crore and marked a decline of 4.8% from Rs 2,097 crore in the third quarter of the previous year.
LIC Housing Finance stock performance
The LIC Housing Finance share price today is trading at Rs 571.50, up by 2.49% during the intraday trading session. The company has seen a decline in its stock price over recent months. The share price of LIC Housing Finance is currently down by 1.32% over the past five days. Over the last six months, it has fallen by 16.78%, and in the past year, the price dropped by 10.84%.
The company’s market capitalisation stands at Rs 31,430 crore. Its stock has ranged from a 52-week high of Rs 826.75 to a low of Rs 531.00.