LIC Housing Finance
Reco: BUY
CMP: Rs174
Target Price: Rs210
Valuations comfortable; upgrade to BUY
· Recent increases in the lending rates to take care of NIMs atleast for next two quarters. We are already building in 20bps pressure in spreads/NIMs next year
· Developers' loan portfolio only on pause now, to start disbursing fresh loans from Q4FY11 onwards. The proportion of developers' loan to remain steady at 11% of total
· Developers' loans portfolio NPAs are minimal. The loans under investigation at Rs3.9bn which are all performing assets
· Valuations at 1.7x/1.4x FY11E/FY12E ABV – valuations attractive looking at 22% avg RoEs despite higher provisions and building lower NIMs. Upgrade to BUY with TP of Rs210
No comments:
Post a Comment