Hold LIC Housing Finance: target of Rs 520: ICICI Securities

What happened

ICICI Securities retained a HOLD rating on LIC Housing Finance with a target of Rs 520. LICHF's Q2FY27 profit after tax rose to INR 15bn on provision write-back, while loan disbursements grew 11% year on year and AUM growth stayed soft at 5%.

Confirmed

Global impact / market context

Faster disbursements than portfolio growth means new loans are being offset by repayments, so total assets barely expand. The pivot toward self-employed borrowers and project finance is meant to offset market share lost to banks, but it may bring different credit risks.

Analyst inference

Banks competing hard in individual home loans have pushed LICHF's disbursement share to 27% against a 40% portfolio share. The revised Rs 520 target, down from Rs 540, values the stock at 0.6 times estimated book value per share for September FY27.

Analyst inference

What to watch

1. Management targets overall loan growth of 8–10% in FY27 and disbursement growth of 12–14% in FY27, so quarterly disbursement figures will show whether the strategy is delivering. Confirmed
2. The company plans to focus on self-employed borrowers in prime home loans and loans against property, plus project finance, so watch whether these segments lift growth without raising bad loans. Proposed
3. Loans against property, lease rental discounting and developer financing stood at 16% of the book in the latest reported period, so expansion there could change the risk profile and funding needs. Analyst inference

Evidence

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