CD Equisearch

LICHFL (Buy)

CMP: ₹461.40

Target: ₹578

LIC Housing Finance Ltd is one of the largest housing finance company in India. Incorporated on June 19, 1989, under the Companies Act, 1956, the company was promoted by LIC of India and went public in the year 1994. The company launched its maiden GDR issue in 2004. LICHFL, in the past few years, has not only managed to post robust earnings growth but also broadened its product portfolio. With the growth in the individual retail loans, it has also kept the pace of the developer loans and is focusing more on the LAP (loan against property) product in years to come. The loan portfolio is expected to clock ₹1.43 lakh crore in FY17 which is a growth of 14.4 per cent and to ₹1.62 lakh crore in FY18 with LAP constituting 13 per cent of the total portfolio.

LICHFL’s renewed focus on boosting the high margin yielding LAP portfolio would galvanise its order book over the next few years. Healthy growth in loan book supplemented by marginal rise in NIMs would culminate in over 18 per cent growth (annual) in earnings over the next two years; needless to mention its industry beating return on equity.

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