Despite marginally weak fourth-quarter results, the brokerage firms are bullish on LIC Housing Finance shares, and raised the price target. The company on Tuesday reported a fall in net profit in the last quarter of fiscal 2021 (FY21) amid an impairment spike on the financial instruments. 

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LIC Housing Finance's net profit slipped by 5.33 per cent to Rs 398.9 crore in the March-ended quarter of FY21 as compared to Rs 421.43 crore in the same period a year ago. The board of directors of LIC Housing recommended a dividend of 425 per cent for the financial year, it said in filing to exchanges. 

Maintaining a Buy on inexpensive valuations, CLSA said LIC Housing’s asset quality a key negative surprise. It further added, preferential allotment to LIC would be lower leverage to 9x to 10x and sets a target price of Rs 700 apiece.  

At around 11:15 am, LIC HFC’s stock declined by around three and half per cent to Rs 504.5 per share as compared to 521.75 per share previous close on the BSE. 

Capital raise is a welcome move for LIC Housing; growth seems to be making a comeback, Macquarie said maintaining an Outperform call on the stock. It added, capital raise a welcome move with growth seems to be making a comeback. It set a target of Rs 600 per share. 

The company said, the impairment costs on financial instruments rose multi-fold to Rs 977.19 crore in Q4 FY21 versus Rs 27.25 crore year-on-year basis. The provisions on Expected Loss Basis (ECL) stood at Rs 3,971.42 crore as on March 31, 2021, as against Rs 2,612.39 cr as on March 31, 2020. 

LIC HFL Managing Director and Chief Executive Officer Y Viswanatha Gowd said in a management commentary that there has been an increase in delinquency levels during the fourth quarter of FY21, mostly arising out of pandemic impact on corporate entities and individuals.