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.
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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,
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