LIC HFL gets “BUY” rating from brokerage :The stock of LIC Housing Finance Limited (LIC HFL), the country’s leading housing finance company, has seen a huge decline in the recent past. The stock of this associate NBFC of Life Insurance Corporation (LIC) fell by Rs 33.20 i.e. 4.84% on Tuesday itself and closed at Rs 652.95. Not only this, during the last 5 trading days, the stock of LIC HFL has fallen by about Rs 121 i.e. 15.65%. However, if we talk about the current year, the performance of LIC HFL stock has been better. From the beginning of 2024 till date (YTD), the share price of LIC HFL has increased by about Rs 90 or 15.97%.
Opportunity to buy LICHFL or sell it?
In such a situation, many investors must be wondering whether this fall in LIC HFL stock is an opportunity to buy or is it better to sell it and get out? Especially those investors, who have bought this stock at a lower price last year or before and are still in profit, must be thinking about this.
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Profitability and returns expected to improve
Brokerage analyst Sameer Bhise has said in his report that LIC HFL’s profitability and returns are likely to improve in the coming months. According to JM Financial, the company’s return on assets (RoA) is expected to be more than 1.7% and return on equity (RoE) more than 15% by FY26. This is because the company’s performance will be good in terms of loan growth and margin. Also, the cost of credit will be low and operating expenses will remain under control.
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The brokerage has said in its report that according to the latest results of LIC HFL, the company’s June quarter profit (PAT) has been Rs 1300 crore, which may be 2 percent less on an annual basis (YoY) compared to the same quarter last year, but on a quarterly basis (QoQ) it has increased by 19 percent.
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Brokerage gave advice to buy
Brokerage JM Financial has given a “BUY” rating to LIC Housing Finance shares for the long term and has recommended buying them at current levels. In a recent report, the brokerage has made this recommendation keeping in mind the financial performance and fundamentals of LIC HFL. The brokerage has recommended buying with a target price of Rs 750 for 12 months. This target is based on the possibility of LIC HFL’s potential profit to book ratio (FY26E P/B) being 1x for FY 2025-26.
(Disclaimer: The opinion given in this article is of the brokerage house and not of Financial Express Online. Investment in the stock market is associated with market risk. Take any investment related decision only in consultation with your investment advisor.)
