CLSA has maintained its ‘Outperform’ rating on LIC Housing Finance with a target price of Rs 720, citing a stronger-than-expected fourth-quarter performance and improving asset quality metrics.
According to CLSA, net interest income (NII) and pre-provision operating profit (PPOP) for Q4FY25 came in 3–5% ahead of estimates, aided by a lower cost of funds. The brokerage also noted that credit costs were lower than expected, leading to a 6% beat in net profit estimates.
Asset quality showed improvement, with gross Stage 3 loans at 2.5% and negative net slippages for the third consecutive quarter. CLSA also highlighted that loan growth in FY25 exceeded expectations, driven by a pickup in disbursals during the March quarter.
Looking ahead, CLSA expects LIC Housing to continue delivering 8–9% loan growth over FY26–28. The stock was last trading at Rs 616.85.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.