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

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<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")</a> reported decent disbursement growth of 14.5% YoY in Q1FY27. Overall AUM growth was tepid at 4% YoY but this is slated to pick up in FY27.</li>
<li>Asset quality has been consistently improving with Stage 3 assets at 2.14% vs 2.16% QoQ and Stage 2 assets at 2.60% vs 2.78% QoQ.</li>
<li>LICHF continues to trade at cheap valuation at below 5x P/E; thus an investment in LICHF at current valuation has potential to triple.</li>
</ul>



LIC Housing Finance ("LICHF") reported decent disbursement growth of 14.5% YoY in Q1FY27. Overall AUM growth was tepid at 4% YoY but this is slated to pick up in FY27.
Asset quality has been consistently improving with Stage 3 assets at 2.14% vs 2.16% QoQ and Stage 2 assets at 2.60% vs 2.78% QoQ.
LICHF continues to trade at cheap valuation at below 5x P/E; thus an investment in LICHF at current valuation has potential to triple.


LICHF: Growth Is Reviving | FY27 Could Be the Pivot

Derivatives and Quantitative Strategist

Gaudenz Schneider

<ul>
<li>
Context: The <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> vs. <a href="https://www.smartkarma.com/entities/bank-of-india" target="_blank" data-smartkarma-citation="entities:541:1" rel="noopener">Bank Of India (BOI IN)</a> price-ratio deviates more than two standard deviations from its one-year average, presenting a potential relative value opportunity.</li>
<li>
Highlights: Going long <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> and short <a href="https://www.smartkarma.com/entities/bank-of-india" target="_blank" data-smartkarma-citation="entities:541:1" rel="noopener">Bank Of India (BOI IN)</a> targets a 7% return.</li>
<li>
Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.</li>
</ul>



Context: The LIC Housing Finance (LICHF IN) vs. Bank Of India (BOI IN) price-ratio deviates more than two standard deviations from its one-year average, presenting a potential relative value opportunity.

Highlights: Going long LIC Housing Finance (LICHF IN) and short Bank Of India (BOI IN) targets a 7% return.

Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.


Long LIC Housing (LICHF IN) Vs. Short Bank of India (BOI IN): Statistical Arbitrage Pair Trade

<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")</a>  has had a sluggish growth phase over the last two years due to competition from banks. However, growth is now reviving with LICHF taking new initiatives.</li>
<li>LICHF is enhancing its mix towards LRD and LAP loans, while simultaneously venturing into affordable housing from scratch. Disbursements grew 10% YoY in Q4FY26.</li>
<li>Asset quality has been continuously improving and a few big accounts have also seen resolution. In Q4, INR 70cr was recovered from a large account via sale to an ARC.</li>
</ul>



LIC Housing Finance ("LICHF")  has had a sluggish growth phase over the last two years due to competition from banks. However, growth is now reviving with LICHF taking new initiatives.
LICHF is enhancing its mix towards LRD and LAP loans, while simultaneously venturing into affordable housing from scratch. Disbursements grew 10% YoY in Q4FY26.
Asset quality has been continuously improving and a few big accounts have also seen resolution. In Q4, INR 70cr was recovered from a large account via sale to an ARC.


LICHF: Taking New Initiatives to Revive Growth

<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")</a>  has significantly improved its asset quality, its growth continues to remain sluggish due to intense competition from banks.</li>
<li>LICHF has been diversifying away from lending to salaried prime borrowers into affordable home loans. Its impact on growth would be gradual as the mix improves.</li>
<li>However, LICHF is trading at a very cheap valuation of 0.7x P/B, similar to COVID level, thus offering a strong upside potential even if growth takes a while to revive.</li>
</ul>


While LIC Housing Finance ("LICHF")  has significantly improved its asset quality, its growth continues to remain sluggish due to intense competition from banks.
LICHF has been diversifying away from lending to salaried prime borrowers into affordable home loans. Its impact on growth would be gradual as the mix improves.
However, LICHF is trading at a very cheap valuation of 0.7x P/B, similar to COVID level, thus offering a strong upside potential even if growth takes a while to revive.


LICHF: Growth Sluggish, But Valuation Presents Strong Upside As Growth Revives

<ul>
<li>LICHF's asset quality has improved considerably with Stage 3 assets now at 2.51% vs 2.62% QoQ and 3.06% YoY. Recoveries have been also meaningful and are likely to contribute further. </li>
<li>NIM declined to 2.62% vs 2.68% QoQ due to repricing of back book per the 25bp PLR cut. NIM is set to expand as borrowing costs come down.</li>
<li>While growth has been below par due to intense competition from PSU banks; adjusted for balance transfer, it has been decent. Furthermore, H2FY26 tends to be seasonally better.</li>
</ul>


LICHF's asset quality has improved considerably with Stage 3 assets now at 2.51% vs 2.62% QoQ and 3.06% YoY. Recoveries have been also meaningful and are likely to contribute further. 
NIM declined to 2.62% vs 2.68% QoQ due to repricing of back book per the 25bp PLR cut. NIM is set to expand as borrowing costs come down.
While growth has been below par due to intense competition from PSU banks; adjusted for balance transfer, it has been decent. Furthermore, H2FY26 tends to be seasonally better.


LIC Housing Finance (LICHF): Growth Still Elusive But Asset Quality Has Normalized

India

LIC Housing Finance is a major Indian housing finance company that provides long-term financing for the purchase, construction, repair, and renovation of residential properties for individuals and corporate entities. The company offers a diverse product portfolio including home loans, plot loans, home improvement loans, and loans against property. It was founded in 1989 and is headquartered in Mumbai, India.

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LIC Housing Finance (LICHF IN)

LICHF: Growth Is Reviving | FY27 Could Be the Pivot

LICHF's AUM growth is likely to revive to10% in FY27, led by healthy disbursement growth. At below 5x FY27E P/E, LICHF is available cheap and an...

Ankit Agrawal, CFA

Long LIC Housing (LICHF IN) Vs. Short Bank of India (BOI IN): Statistical Arbitrage Pair Trade

Potential relative value opportunity with a 7% target-return by going long LIC Housing Finance and short Bank of India. Essential for quantitative...

Gaudenz Schneider

LICHF: Taking New Initiatives to Revive Growth

Due to competition from banks, growth had been sluggish but is now reviving led by LICHF's new initiatives. At current valuation, an investment in...

Ankit Agrawal, CFA

LICHF: Growth Sluggish, But Valuation Presents Strong Upside As Growth Revives

LICHF has been facing tepid growth for the last couple of years due to intense competition from banks. However, at 0.7x P/B, it offers strong...

Ankit Agrawal, CFA

LIC Housing Finance (LICHF): Growth Still Elusive But Asset Quality Has Normalized

LICHF's asset quality has normalized. Growth remains sub-par but is on track to improve. The stock has potential to re-rate significantly as it is...

Ankit Agrawal, CFA

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