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Motilal Oswal Report
LIC Housing Finance Ltd.'s valuation of ~1.1 times FY26E price/book value reflects the muted loan growth, frequent one-offs in operating expenses, and net interest margin volatility.
We believe that the company will demonstrate more predictability in its NIM trajectory and earnings profile going forward. LIC Housing Finance is a potential candidate for a valuation re-rating if it is able to provide investors with higher confidence in double-digit loan growth over FY25-26.
LIC Housing Finance has strong moats in both retail mortgages and on the liability side. We estimate an return on asset/return on equity of 1.6%/14% in FY26 and reiterate our Buy rating with a target price of Rs 930 (based on 1.3 times FY26E book value).
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