LICHSGFIN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.2
| Stock Code | LICHSGFIN | Market Cap | 27,919 Cr. | Current Price | 508 ₹ | High / Low | 647 ₹ |
| Stock P/E | 5.11 | Book Value | 699 ₹ | Dividend Yield | 1.97 % | ROCE | 8.93 % |
| ROE | 16.0 % | Face Value | 2.00 ₹ | DMA 50 | 535 ₹ | DMA 200 | 564 ₹ |
| Chg in FII Hold | 0.19 % | Chg in DII Hold | -0.33 % | PAT Qtr | 1,384 Cr. | PAT Prev Qtr | 1,354 Cr. |
| RSI | 39.6 | MACD | -6.11 | Volume | 17,50,287 | Avg Vol 1Wk | 14,12,994 |
| Low price | 484 ₹ | High price | 647 ₹ | PEG Ratio | 0.15 | Debt to equity | 7.10 |
| 52w Index | 14.8 % | Qtr Profit Var | -3.35 % | EPS | 99.4 ₹ | Industry PE | 16.7 |
📊 Financials: LIC Housing Finance demonstrates strong fundamentals with ROE at 16.0% and ROCE at 8.93%, reflecting decent profitability and capital efficiency. Debt-to-equity ratio of 7.10 is high, typical for housing finance companies, but requires monitoring. Quarterly PAT improved slightly from 1,354 Cr. to 1,384 Cr., though profit variation (-3.35%) indicates margin pressure. Cash flows remain stable, supported by lending operations and consistent demand in housing finance.
💹 Valuation: Current P/E of 5.11 is significantly below industry average (16.7), suggesting undervaluation. P/B ratio (~0.73) indicates the stock is trading below book value, offering strong value appeal. PEG ratio of 0.15 highlights attractive growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 490–510 ₹, offering margin of safety compared to current price (508 ₹).
🏢 Business Model & Advantage: LIC Housing Finance operates in housing finance, providing loans for residential properties. Its competitive advantage lies in strong brand recognition under LIC, wide distribution network, and trust-based customer relationships. Market cap of 27,919 Cr. positions it as a mid-to-large cap financial player with resilience and growth potential in India’s housing finance sector.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 490–510 ₹. Long-term investors may hold given strong fundamentals, undervaluation, and sector demand. Technical indicators (RSI 39.6, MACD negative) show near-term weakness, but long-term outlook remains positive.
Positive
- Low P/E (5.11) compared to industry average (16.7) suggests undervaluation.
- P/B ratio (~0.73) indicates stock trading below book value.
- PEG ratio of 0.15 highlights strong growth-adjusted valuation.
- Strong brand presence under LIC with wide distribution network.
- FII holding increased (+0.19%), showing foreign investor confidence.
Limitation
- High debt-to-equity ratio (7.10) reflects leverage risk.
- ROCE (8.93%) is modest compared to sector leaders.
- Quarterly PAT variation (-3.35%) highlights margin pressure.
- DII holding decreased (-0.33%), showing reduced domestic institutional support.
- Dividend yield of 1.97% is moderate, limiting income appeal.
Company Negative News
- Decline in DII holding (-0.33%) reflects reduced domestic institutional confidence.
- Weak technical indicators (RSI 39.6, MACD -6.11) show bearish momentum.
Company Positive News
- Quarterly PAT growth from 1,354 Cr. to 1,384 Cr. highlights earnings resilience.
- FII inflows (+0.19%) show foreign investor support.
Industry
- Industry P/E at 16.7 indicates moderate valuation levels.
- Housing finance sector benefits from rising real estate demand and government support.
- Companies with strong brand presence and distribution networks hold competitive advantage.
Conclusion
⚖️ LIC Housing Finance demonstrates strong fundamentals with undervaluation, attractive PEG ratio, and brand strength. Despite high leverage and modest ROCE, the company remains a resilient player in housing finance. Entry around 490–510 ₹ is recommended for long-term investors, with cautious monitoring of debt levels and institutional flows.