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LIC Housing Finance dips 3% after lower profit in Q4 results

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LIC Housing Finance share price fell over 3 percent on Wednesday, dipping to its day's low of Rs 505.05 per share.

LIC Housing Finance dips 3% after lower profit in Q4 results
LIC Housing Finance share price fell over 3 percent on Wednesday after the mortgage firm's net profit declined in the March quarter over a rise in provisions. Its net profit fell 5.33 percent to Rs 398.9 crore in Q4 versus Rs 421.43 crore in the year-ago quarter.
The stock fell as much as 3.2 percent to its day's low of Rs 505.05 per share.
The net interest income (NII) in the quarter under review was up 33 percent to Rs 1,505 crore as against Rs 1,134 crore in Q4FY21. Net Interest Margin (NIM) in Q4 also improved to 2.66 percent from 2.17 percent in the year-ago quarter.
During the quarter, provisions stood at Rs 1,000 crore and total disbursements were at Rs 22,362 crore in Q4 FY2021, up 97 percent as against Rs 11,323 crore in the year-ago period.
Y Viswanatha Gowd, managing director and chief executive of the firm said there has been an increase in delinquency levels during the Q4 FY21, mostly arising out of pandemic impact on corporate entities and individuals.
The portfolio of loans to individuals rose 10 percent to Rs 2,16,047 crore in March 2021 from Rs 1,96,340 crore a year ago
For the full financial year FY21, the net profit rose 13.8 percent to Rs 2,734.3 crore from Rs 2,401.8 crore in FY20.
The Board of Directors has recommended a dividend of 425 percent for the financial year, the company said in a statement.
Brokerages, however, remain bullish on the stock despite the decline. Macquarie has an 'outperform' rating on the stock with a target at Rs 600 per share. The company sees the highest-ever disbursement, while NPLs sour the mood, it said.
There is a preferential allotment of Rs 2,300 crore of equity to promoter LIC and capital raise a welcome move with growth seems to be making a comeback, added Macquarie.
CLSA also has a 'buy' call on the stock and raised its target to Rs 700 per share. CLSA has maintained buy on inexpensive valuations. The asset quality is a key negative surprise and preferential allotment to LIC would lower leverage to 9x from 10x.