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<ul><li>LIC Housing Finance: LICHF’s earnings continued to remain sub-par with P&amp;L outcomes significantly below estimates</li><li>Credit costs shot up to ~120bps (annualised), as the company shored up its Stage-III provisions to 51% (Q2FY23: 44%) in order to maintain healthy provisioning levels</li><li>While there were low incremental impairments (no write-offs during Q3), the slow pace of resolutions, particularly in project loans (GS-III at ~46%), remains a concer.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

LIC Housing Finance: LICHF’s earnings continued to remain sub-par with P&amp;L outcomes significantly below estimatesCredit costs shot up to ~120bps (annualised), as the company shored up its Stage-III provisions to 51% (Q2FY23: 44%) in order to maintain healthy provisioning levelsWhile there were low incremental impairments (no write-offs during Q3), the slow pace of resolutions, particularly in project loans (GS-III at ~46%), remains a concer.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: LIC Housing Finance, Vinati Organics, The Ramco Cements

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

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Equity Bottom-Up

<ul>
<li>While <a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF IN)</a> posted substantial decline in NIM to 1.80% vs 2.54% QoQ, this was largely due to one-off impact from a couple of items.</li>
<li>LICHF has maintained its prior guidance of beating FY22 NIM of 2.29%, which means that for full-year FY23, LICHF is still on track for a NIM of 2.3% or above.</li>
<li>There was a one-off provisioning relating to INR 180cr of write-offs, which was fully provided for, but due to Ind-AS accounting had to be booked again resulting in excess provisioning.</li>
</ul>


While LIC Housing Finance (LICHF IN) posted substantial decline in NIM to 1.80% vs 2.54% QoQ, this was largely due to one-off impact from a couple of items.
LICHF has maintained its prior guidance of beating FY22 NIM of 2.29%, which means that for full-year FY23, LICHF is still on track for a NIM of 2.3% or above.
There was a one-off provisioning relating to INR 180cr of write-offs, which was fully provided for, but due to Ind-AS accounting had to be booked again resulting in excess provisioning.


LICHF: FY23 NIM Guidance Intact Despite One-Off Impact in Q2FY23

<ul>
<li>With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.</li>
<li>We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at &lt;5.5x FY23 P/E.</li>
<li>Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.</li>
</ul>


With Q1FY23 PAT at INR 925cr+, LICHF is on track to beat our prior estimate of INR 3600cr+ for FY23 PAT.
We now project that LICHF can do INR 3850cr+ PAT in FY23, implying that at the current market cap of INR 21,000cr, LICHF is trading cheap at &lt;5.5x FY23 P/E.
Credit cost for the quarter was slightly higher at annualized 0.5% of AUM, however, excluding slippages from the OTR book, it was in line with long-term average of around 0.2-0.3%.


LICHF: Earnings On Track To Beat Our Prior Projections

<ul><li>State Bank of India: Despite a multi-quarter high loan growth (~16% YoY) and lower credit costs at 0.7% (annualised), SBIN missed expectations, driven by one-off MTM losses (INR65bn)</li><li>Slippages were elevated QoQ (~1.5%), driven by SME, agri and retail including INR20bn from the restructured portfolio (~1% of loans)</li><li>The management is confident of a sustained business momentum from improving utilisation of corporate credit limits and traction in SMEs, which should likely support incremental loan growth</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

State Bank of India: Despite a multi-quarter high loan growth (~16% YoY) and lower credit costs at 0.7% (annualised), SBIN missed expectations, driven by one-off MTM losses (INR65bn)Slippages were elevated QoQ (~1.5%), driven by SME, agri and retail including INR20bn from the restructured portfolio (~1% of loans)The management is confident of a sustained business momentum from improving utilisation of corporate credit limits and traction in SMEs, which should likely support incremental loan growthContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: State Bank of India, Titan, Bharat Petroleum Corporation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF IN)</a> reported stellar results, in line with the expectation from our last note. NIM expanded while provisions declined leading to Q4FY22 PAT of INR 1100cr+.</li>
<li>Asset quality improved with Stage 3 assets at 4.64% vs 5.04% QoQ and Stage 2 assets at 3.08% vs 3.75% QoQ. LICHF also recovered 350cr of NPAs during Q4FY22.</li>
<li>Adjusted for one-off tax benefits and assuming FY23 NIM at 2.4%, LICHF's normalized PAT potential is INR 3600cr+ suggesting that LICHF is trading at &lt;6x P/E on FY23E PAT.</li>
</ul>



LIC Housing Finance (LICHF IN) reported stellar results, in line with the expectation from our last note. NIM expanded while provisions declined leading to Q4FY22 PAT of INR 1100cr+.
Asset quality improved with Stage 3 assets at 4.64% vs 5.04% QoQ and Stage 2 assets at 3.08% vs 3.75% QoQ. LICHF also recovered 350cr of NPAs during Q4FY22.
Adjusted for one-off tax benefits and assuming FY23 NIM at 2.4%, LICHF's normalized PAT potential is INR 3600cr+ suggesting that LICHF is trading at &lt;6x P/E on FY23E PAT.


India

LIC Housing Finance Limited provides housing finance services to individuals for purchase, construction, repair and renovation of new or existing flats and houses. The Company also provides finance on existing property for business, personal needs and gives loans to professionals for purchase, construction of clinics, nursing homes, diagnostic centers, and office space throughout India.

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LIC Housing Finance (LICHF IN)

HSIE Results Daily: LIC Housing Finance, Vinati Organics, The Ramco Cements

Credit costs shot up to ~120bps (annualised), as the company shored up its Stage-III provisions to 51% (Q2FY23: 44%) in order to maintain healthy...

HDFC Securities

LICHF: FY23 NIM Guidance Intact Despite One-Off Impact in Q2FY23

Despite a poor show in Q2FY23, we project that LICHF is on track to post INR 3200cr+ of PAT in FY23, which implies that LICHF is available at an...

Ankit Agrawal, CFA

LICHF: Earnings On Track To Beat Our Prior Projections

Q1FY23 PAT of INR 925cr+ suggests that LICHF is on track to beat our prior estimate of INR 3600cr+ FY23 PAT. We now estimate it to do 3850cr+ PAT,...

Ankit Agrawal, CFA

HSIE Results Daily: State Bank of India, Titan, Bharat Petroleum Corporation

Slippages were elevated QoQ (~1.5%), driven by SME, agri and retail including INR20bn from the restructured portfolio (~1% of loans)

HDFC Securities

LICHF: Stellar Q4FY22 Results

LICHF reported stellar Q4FY22 earnings in line with our expectation. FY23 PAT is likely to be INR 3600cr+, suggesting that LICHF is available at an...

Ankit Agrawal, CFA

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