Profitable Stock LIC Housing Finance Ltd from CapitalHeight

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on Jan 22, 2018
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LIC Housing Finance Ltd is one of the largest Housing Finance Company in India. The company is engaged in the business of providing loans for purchase, construction, repairs and renovation of houses/flats to individuals, corporate bodies, builders and co-operative housing societies and has its operations within India. They provide loans for homes, construction activities, its corporate housing schemes. Around 89% of the loan portfolio derived from the retail segment and the rest from large corporate clients.

Incorporated in 1989, LIC Housing Finance Limited is one of the largest Housing Finance companies in India, with the key objective of providing long-term finance to individuals for the purchase or construction of a house or a flat for residential purposes. The Company also provides finance on an existing property for business or personal needs, and also gives loans to professionals for buying their office space and equipment. The Company also provides finance to persons engaged in the business of construction and the sale of residential properties. The Company went public in 1994 and since then its stocks are listed and actively traded on the National Stock Exchange (NSE) and Bombay Stock Exchange Limited (BSE). The Company has also launched its GDR in 2004 and its GDS’s are listed on Luxembourg Stock Exchange.

SUBSIDIARIES

  • LICHFL Financial Services Limited.
  • LICHFL Asset Management Company Limited.
  • LICHFL Care Homes Limited.​

Fundamental Analysis

LIC Housing Finance Ltd is a housing finance company. The firm primarily provides long-term loans for various purposes such as residential renovation, business, and construction of nursing homes and diagnostic centers and office space.NPAs for housing loans of up to 2 lakh stood at a whopping 11.9% for PSBs during 2016-17. Housing finance companies also saw a sharp surge in housing loan NPAs in this slab. NPAs went up from 6.1% to 8.6% for the sub- 2 lakh slab between 2015-16 and 2016-17. NPAs stood at 10.4% for this slab.

  • The overall NPAs for housing loans stood at 1.5% and 0.6% respectively for PSBs and housing finance companies 
  • The government’s recent thrust on affordable housing through policy measures that include incentive schemes, accordance of infrastructure tag, interest subsidy scheme under PMAY (Pradhan Mantri Awas Yojana) have resulted in sharp rise in new housing projects in the affordable segment for low income groups.
  • Affordable housing was the only segment in the residential real estate sector that saw a double digit growth
  • There has been a more than three-fold increase in the number of houses completed under PMAY between April-December 2018
  • Net Profits 1931 crore up by 16% Total Loan portfolio up by 15% to 144,534 crore Individual Loan Portfolio up by 14% to 139,024 crore NIMs 2.70% as against 2.52% Total Gross NPAs 0.43%.

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