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O n e t i m e p r o v i s i o n s a n d l o w e r N I I i m p a c t P A T …
LIC Housing surprised negatively with profits declining 58% YoY to | 98
crore vs. | 234 crore in Q2FY11. Also, profits declined 62% QoQ from |
256 crore in Q1FY12, much lower than our estimate of | 281 crore.
Higher NHB mandated provisions made to the tune of | 204 crore and
higher interest costs led to this decline. NII grew lower than estimated
and was just | 334 crore, a rise of 9.5% YoY and decline of 7.4% QoQ.
Margins dipped to 2.45% from 2.78% sequentially and from 2.93% YoY.
However, management has maintained guidance of 2.7% NIM for FY12E.
ƒ Business growth to moderate…
Project loans share continued to dip from 7.6% to 7% QoQ and
down from 11.3% YoY. It disbursed loans of | 4736 crore in the
individual loans segment, growing 24% YoY. Loan disbursements to
developers for Q2FY12 stood at | 412 crore as against |1283 crore
for the same quarter. Overall loan portfolio grew 29% YoY and 6%
QoQ to | 56098 crore. Hence, overall yields rose from 10.29% to
10.40% but higher interest cost burden resulted in calculated cost of
funds surging from 8.49% in Q1FY12 to 8.95% in Q2FY12. NIMs
declined to 2.45% from 2.78% while spreads contracted from 1.78%
to 1.45% both sequentially.
The management expects project loans to increase from current
levels. We expect loan growth to remain at ~24% for FY12 but NII
growth has been revised downwards to 15% YoY from 21% YoY.
ƒ Asset quality seems stable...
Q2FY12 GNPA decreased QoQ to 0.64% (| 359 crore) from 0.84% (|
444 crore). The NNPA ratio also improved tot 0.12% (| 66 crore)
from 0.35% (| 184 crore). NHB required |204 crore provisions
leading to dip in PAT. However, |100 crore extra provision lies in
B/S & should get reversed in H2FY12 reducing impact on FY12 PAT.
V a l u a t i o n
We have decreased our NII estimates by 6-7% and profit estimates by
10% for FY12E & FY13E. Hence, FY12E return ratios have slightly
corrected from 2% to 1.8% for RoA. RoE has been revised to 23% while
ABV has been changed from | 133 to | 128. Hence, the target price has
been revised to | 232 from | 242 earlier with a HOLD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
O n e t i m e p r o v i s i o n s a n d l o w e r N I I i m p a c t P A T …
LIC Housing surprised negatively with profits declining 58% YoY to | 98
crore vs. | 234 crore in Q2FY11. Also, profits declined 62% QoQ from |
256 crore in Q1FY12, much lower than our estimate of | 281 crore.
Higher NHB mandated provisions made to the tune of | 204 crore and
higher interest costs led to this decline. NII grew lower than estimated
and was just | 334 crore, a rise of 9.5% YoY and decline of 7.4% QoQ.
Margins dipped to 2.45% from 2.78% sequentially and from 2.93% YoY.
However, management has maintained guidance of 2.7% NIM for FY12E.
ƒ Business growth to moderate…
Project loans share continued to dip from 7.6% to 7% QoQ and
down from 11.3% YoY. It disbursed loans of | 4736 crore in the
individual loans segment, growing 24% YoY. Loan disbursements to
developers for Q2FY12 stood at | 412 crore as against |1283 crore
for the same quarter. Overall loan portfolio grew 29% YoY and 6%
QoQ to | 56098 crore. Hence, overall yields rose from 10.29% to
10.40% but higher interest cost burden resulted in calculated cost of
funds surging from 8.49% in Q1FY12 to 8.95% in Q2FY12. NIMs
declined to 2.45% from 2.78% while spreads contracted from 1.78%
to 1.45% both sequentially.
The management expects project loans to increase from current
levels. We expect loan growth to remain at ~24% for FY12 but NII
growth has been revised downwards to 15% YoY from 21% YoY.
ƒ Asset quality seems stable...
Q2FY12 GNPA decreased QoQ to 0.64% (| 359 crore) from 0.84% (|
444 crore). The NNPA ratio also improved tot 0.12% (| 66 crore)
from 0.35% (| 184 crore). NHB required |204 crore provisions
leading to dip in PAT. However, |100 crore extra provision lies in
B/S & should get reversed in H2FY12 reducing impact on FY12 PAT.
V a l u a t i o n
We have decreased our NII estimates by 6-7% and profit estimates by
10% for FY12E & FY13E. Hence, FY12E return ratios have slightly
corrected from 2% to 1.8% for RoA. RoE has been revised to 23% while
ABV has been changed from | 133 to | 128. Hence, the target price has
been revised to | 232 from | 242 earlier with a HOLD rating on the stock.
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