LIC Housing Finance shares gained 63% in last nine months; is there more upside left?
LIC Housing Finance, one of India's largest housing finance companies (HFCs), has witnessed a robust surge in its shares, yielding a remarkable 63% return over the past nine months. The stock gained momentum in March after a sluggish start in the first three months of CY23. In the previous trading session, it jumped 5% to record a new 52-week high of ₹544 apiece.
Going forward, the stock is likely to maintain its upward momentum intact, according to domestic brokerage firm Sharekhan. The brokerage underscores the stock's attractive valuation, with a price-to-book value (P/BV) ratio of 0.7/0.6x its FY25E/FY26E estimates. Consequently, it maintains a 'buy' rating on the stock, revising its target price to ₹555 per share.
Also Read: LIC share price hits 52-week high. Can the stock cross over its issue price of ₹949 per share? Sharekhan anticipates LIC Housing Finance (LICHF) to achieve double-digit Asset Under Management (AUM) growth as disbursements exhibit an upward trend (reached Rs. 5.1 billion in October 2023 against Rs.
4.5–4.8 billion/monthly in Q2 FY24). It said that the company's management foresees sustained momentum in disbursements, expecting the sanction to disbursements ratio to increase beyond the current 80%. The brokerage highlights the completion of the IT-related transformation that disrupted disbursements in Q1FY24.
With 84% of the total book dedicated to individual home loans and strong demand in this segment, Sharekhan projects LICHF's AUM to grow at a CAGR of 11% over FY23–26E. Also Read: Manappuram Finance shines on non-gold loan shift During H1FY24, LICHF managed to keep NIM over 3.0%, benefiting from cumulative PLR hikes of 235 basis points during the past 12 months. While it is expected to
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