Motilal Oswal Securities Limited (MOSL) has maintained its Neutral stance on LIC Housing Finance with a revised target price of ₹670 per share, up from ₹650 earlier. The brokerage highlighted continued margin pressure as a key concern for FY26, which is likely to weigh on loan growth.
According to the report, LIC Housing Finance is expected to report ~8% CAGR in advances and ~3% CAGR in PAT over FY25–27. However, the return ratios remain modest, with RoA and RoE projected at 1.6% and 13% respectively by FY27.
The management has flagged rising competition from banks in the super-prime housing segment, putting additional pressure on growth. Despite this, the company is prioritizing net interest margins (NIMs) over aggressive expansion. MOSL noted that the firm has guided for a NIM band of 2.6–2.8% in FY26.
The brokerage estimates the NIM to come in at 2.6% in FY26 and 2.7% in FY27, slightly down from ~2.8% in FY25. Given the macro environment, MOSL expects FY26 to be a balancing act for the company—navigating trade-offs between loan growth and margin protection.
With no near-term catalysts in sight, Motilal Oswal has reiterated its Neutral call on the stock.
Disclaimer: The views and target price mentioned in this article are based on the brokerage report of Motilal Oswal Securities. They do not represent the views or recommendations of this publication. Investors are advised to consult their financial advisors before taking any investment decisions.
