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.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

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

<ul>
<li>As projected by us, <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> ended FY25 with a strong PAT of INR 5400cr+ (up 14%+ YoY), led by normalized credit cost of around 0.1%.</li>
<li>Q4FY25 PAT at INR 1374cr grew strong at 25%+ YoY. FY25 AUM grew 7.1% despite certain technical challenges. Total disbursements in FY25 grew at 9% YoY. </li>
<li>NIM ended FY25 at 2.73%, in line with the expectation. Led by technical write-offs and sale of certain NPAs to ARCs, Stage 3 assets improved to 2.47% vs 3.31% YoY.</li>
</ul>


As projected by us, LIC Housing Finance ("LICHF") ended FY25 with a strong PAT of INR 5400cr+ (up 14%+ YoY), led by normalized credit cost of around 0.1%.
Q4FY25 PAT at INR 1374cr grew strong at 25%+ YoY. FY25 AUM grew 7.1% despite certain technical challenges. Total disbursements in FY25 grew at 9% YoY. 
NIM ended FY25 at 2.73%, in line with the expectation. Led by technical write-offs and sale of certain NPAs to ARCs, Stage 3 assets improved to 2.47% vs 3.31% YoY.


LICHF: FY25 Performance Ended in Line With the Expectation

<ul>
<li>LICHF reported PAT growth of 23% YoY in Q3FY25 led by benign credit cost. Credit cost was negative (-44cr) in Q3FY25 vs INR 435cr (0.2%+ of AUM) in Q3FY24.</li>
<li>Stage 1 assets improved to 93.25% of AUM vs 93.09% QoQ. NIM continues to be stable at around 2.7%, similar to last quarter, making the earnings predictable now. </li>
<li>Led by low credit cost, LICHF is on track to achieve FY25 PAT as per our estimate of INR 5400cr+. This implies LICHF is currently trading at below 6x P/E.</li>
</ul>


LICHF reported PAT growth of 23% YoY in Q3FY25 led by benign credit cost. Credit cost was negative (-44cr) in Q3FY25 vs INR 435cr (0.2%+ of AUM) in Q3FY24.
Stage 1 assets improved to 93.25% of AUM vs 93.09% QoQ. NIM continues to be stable at around 2.7%, similar to last quarter, making the earnings predictable now. 
Led by low credit cost, LICHF is on track to achieve FY25 PAT as per our estimate of INR 5400cr+. This implies LICHF is currently trading at below 6x P/E.


LICHF: Benign Credit Cost Led to Strong Q3FY25

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>LICHF’s 3QFY25 PAT grew ~23% YoY to ~INR14.3b (~12% beat).</li><li>NII declined ~5% YoY to ~INR20b (in line).</li><li>Opex was high and grew ~36% YoY to INR3.6b (~11% higher than MOFSLe) and the cost-to-income ratio rose ~2pp YoY to ~17% (PY: ~12% and PQ: ~15%).</li></ul><p><em>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.</em></p>

LICHF’s 3QFY25 PAT grew ~23% YoY to ~INR14.3b (~12% beat).NII declined ~5% YoY to ~INR20b (in line).Opex was high and grew ~36% YoY to INR3.6b (~11% higher than MOFSLe) and the cost-to-income ratio rose ~2pp YoY to ~17% (PY: ~12% and PQ: ~15%).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 - Disbursements Weak but Asset Quality Continues to Improve

<ul>
<li>Optically speaking LICHF's Q2FY25 results may not look as strong given modest PAT growth of 12% YoY, however, there was substantial improvement in asset quality and credit cost.</li>
<li>Annualized credit cost has stabilized to below 0.2% of AUM for the past couple of quarters, in line with the historical averages.</li>
<li>Last few quarters saw significant variation in earnings due to NIM variation, however, it has now stabilized at around 2.7% vs 3%+ earlier, making the earnings more predictable going forward.</li>
</ul>


Optically speaking LICHF's Q2FY25 results may not look as strong given modest PAT growth of 12% YoY, however, there was substantial improvement in asset quality and credit cost.
Annualized credit cost has stabilized to below 0.2% of AUM for the past couple of quarters, in line with the historical averages.
Last few quarters saw significant variation in earnings due to NIM variation, however, it has now stabilized at around 2.7% vs 3%+ earlier, making the earnings more predictable going forward.


LIC Housing Finance (LICHF): Strong Q2 Led by Asset Quality Stabilization

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>We forecast 7 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 3 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.</li>
<li>From the new listings, 13 stocks are expected to be added to Large Cap, 5 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.</li>
<li>With the review period nearing completion, there could still be more outperformance given the momentum, but we would look to take profit on the stocks as the divergence gets wider.</li>
</ul>


We forecast 7 stocks moving from MidCap to LargeCap, 10 stocks moving from LargeCap to MidCap, 3 stocks from SmallCap to MidCap, and 11 stocks from MidCap to SmallCap.
From the new listings, 13 stocks are expected to be added to Large Cap, 5 stocks are expected to be added to Mid Cap, and multiple stocks to Small Cap.
With the review period nearing completion, there could still be more outperformance given the momentum, but we would look to take profit on the stocks as the divergence gets wider.


AMFI Stock Reclassification Preview (Dec 2025): New Listings Shaking Up the Rankings

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)

LICHF: FY25 Performance Ended in Line With the Expectation

LICHF reported a decent FY25 despite certain technical challenges. It is all set to report a strong FY26. At current valuation, LICHF is trading...

Ankit Agrawal, CFA

LICHF: Benign Credit Cost Led to Strong Q3FY25

LICHF is attractively valued at below 6x P/E on a base of FY25E PAT of INR 5400cr+. At current valuation, an investment in LICHF has potential to...

Ankit Agrawal, CFA

LIC Housing Finance - Disbursements Weak but Asset Quality Continues to Improve

Opex was high and grew ~36% YoY to INR3.6b (~11% higher than MOFSLe) and the cost-to-income ratio rose ~2pp YoY to ~17% (PY: ~12% and PQ: ~15%).

Motilal Oswal

LIC Housing Finance (LICHF): Strong Q2 Led by Asset Quality Stabilization

LICHF reported a strong Q2FY25. In particular, asset quality has been improving significantly. At the current valuation, an investment in LICHF has...

Ankit Agrawal, CFA

AMFI Stock Reclassification Preview (Dec 2025): New Listings Shaking Up the Rankings

We currently forecast 31 migrations for the AMFI December reclassification. Many IPOs could be added to Large/Mid cap. The forecast upward...

Brian Freitas

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