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

ICICI Securities's research report on LIC Housing Finance

LIC Housing Finance (LICHF) sustained its improving earning trajectory in Q2FY27. YoY, PAT expanded to INR 15bn, riding on provision write-back from higher recoveries for the third straight quarter. While disbursements growth climbed to 11% YoY – on track to achieve 12–14% growth in FY27 – AUM growth remained soft at 5% YoY during Q2FY27. Management acknowledged stiff competition from banks in the individual loan segment has eroded its market share – disbursements market share at 27% vs portfolio market share of 40%. To counter this and lift overall loan growth to a targeted 8–10% in FY27, LICHF is pivoting its strategic focus towards the self-employed segment in prime HL and LAP and project finance.

Outlook

This favourable macro shift, alongside a strategic focus towards non-HL segments like LAP, LRD and project financing, could boost loan growth to 8–10% in FY27. Total share of LAP + LRD + developer financing stands at 16%, as on Sep’26. Retain HOLD with a revised TP of INR 520 (vs. INR 540), basis 0.6x Sep FY27E BVPS.