Share of mortgage lender LIC Housing Finance was trading 11% higher in Tuesday's session a day after the company announced its April-June quarter earnings. The mortgage lender reported a 34% growth in its net profit to Rs 817.48 crore for the quarter ending June against Rs 610.68 crore in the April-June quarter of the previous fiscal.
Total income of the company gained marginally to Rs 4,977.49 crore in April-June 2020 against Rs 4,807.21 crore in the year-ago quarter.
Following Q1 earnings, shares of LIC Housing Finance opened with a gain of 4.45% today and later touched an intraday high of Rs 308.4, rising 11.46% on BSE against previous close of Rs 276.70. LIC Housing Finance stock price has gained almost 8% in last 2 days.
LIC Housing Finance share trades higher than 5, 20, 50 and 100- day but lower than 200-day moving averages. LIC Housing Finance stock has risen 10.42% in one week and 8.6% in the last one month. Market capitalisation of the firm stood at Rs 14,943 crore as of today's session.
Company's total provisions fell by 77.69% to Rs 56.5 crore against Rs 253 crore in the corresponding quarter of the previous year. Net interest income (NII) stood at Rs 1,220.61 crore compared to Rs 1,181.86 crore during the same quarter of the previous year.
"The rise in profit is mainly attributed to provisioning which was lower in the quarter as compared to the last time (Q1 FY20). However, we have fully provided for whatever is required," MD and CEO Siddhartha Mohanty said.
Company's total loan portfolio in Q1 FY21 grew by 6% YoY to Rs 2,09,817 crore, as against Rs 1,97,768 crore.
Commenting on Q1FY21 results by LIC Housing, Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking said,"LIC reported mixed set of numbers for Q1FY21, AUM increase 6% YoY and steady QoQ, PAT jumped by 34% to Rs.817.48cr. On the moratorium front, Individual Home Loans under moratorium accounted for 16% an Approximately 25% of the Company's total loans under management are in moratorium as of June 30, 2020. NII increase 3% YoY ted below AUM growth primarily owing to compression in NIM. Opex increased by 36%, however, lower provision cost has helped LIC housing to report PAT jump of 34% YoY."
On the Q1 outlook, he added," Considering the current situation provision taken in Q4FY20 and Q1FY20 is much lower than expected. Currently, LIC housing trades at 0.75x of TTM Networth which is lower compare to the historical average. Considering lower valuation and not much negative in result stock could see positive movement for the midterm."
Motilal Oswal kept a buy rating for the stock and said, "Growth has been sluggish, in the low double digits (barring 1QFY21). In the current pandemic situation, the company would face further headwinds on asset quality, especially in LAP and builder loans."