Sharekhan Initiates Coverage On LIC Group Midcap Stock, Recommends Buy For 17% Upside

Sharekhan initiates a Buy on LIC Housing Finance Ltd. (LICHF) with an unchanged target price of Rs. 435 apiece. The stock with the given target price is likely to give a decent return of 17% if it is purchased at the current market price. It is a midcap stock with a market capitalisation of Rs. 20,468.85/share.

Valuation - Maintain Buy on LICHF with an unchanged PT of Rs. 435/share

Sharekhan said, "At the CMP, the stock trades at 0.7x/0.6x its FY2024E/FY2025E BV estimates. We believe valuations clearly factor in all the related concerns on sub-par growth in business, higher stress in the non-individual book, and below-par return ratios. We acknowledge that smaller HFCs and listed developers are reporting robust trends. Management alluded the reason of the slowdown to select cities and is confident of a bounce-back to double-digit disbursements growth. Asset-quality outlook is stable."

It added, "Restructured book is still under moratorium amounts to Rs. 750 crore that will be tested over the next two quarters; however, there are some resolutions that are expected to be completed in FY2024, which could lead to Rs. 400-500 crore recovery. Thus, the company expects credit costs to remain lower from here on."

Stock's Current Market Price, 52-Week Low/High, & Returns

The stock last traded at Rs. 372.80 apiece, up 1.91% from its previous close of Rs. 365.80 apiece. It has fallen 0.68% in the past 1 week. It jumped 12.54% in 1 month. In the past 1 year, it jumped 5.06% and 60.9% in 3 years. In the past 5 years, it has given 22.64% negative return.

The stock recorded the 52 week low on 20 June 2022 at Rs. 291.75 apiece and 52 week high on 15 September 2022 at Rs. 443.60 apiece.

About - LIC Housing Finance Ltd. (LICHF)

LIC Housing Finance Ltd. (LICHF) is a LIC-backed Non-Banking Financial Company (NBFC). LICHFL is one of the largest Housing Finance Companies in India with a key objective of providing long-term finance to individuals for the purchase or construction of houses/flat for residential purposes in India.

Disclaimer - The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.