January 20, 2017 / 01:40 PM IST
LICHF net earnings of Rs 4.99bn were in‐line with our estimates with strong NII growth of 22.6% YoY at Rs 9.15bn (PLe: Rs 8.82bn) but was offset by lower fee income (down 45% QoQ). Overall loan book grew at 15.3% YoY, but growth was mainly led by strong growth in developer book (45% YoY) and LAP book (87% YoY). Core retail book growth continue to be slow at 9.4% YoY.
Outlook
Asset quality remained stable with both GNPAs & NNPAs down 1bps QoQ at 0.56% & 0.27% respectively. Valuations of 2.1x FY18E & 1.7x FY19E remains at reasonable level, but core retail book continues to struggle with risk of repricing at lower levels on competitive intensity offsetting lowering borrowing cost. Maintain Accumulate.
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