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LICHSGFIN - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.2
📊 Financial Overview
- Profitability: PAT remained stable QoQ at ₹1,354 Cr with a slight dip of 1.88%. EPS stands at ₹100.
- Return Metrics: ROE at 16.0% and ROCE at 8.93% reflect solid capital efficiency for a housing finance company.
- Valuation: P/E of 5.69 is significantly below the industry average (19.3), indicating deep undervaluation.
- P/B Ratio: With a book value of ₹699 and price of ₹571, P/B is ~0.82, suggesting the stock is trading below intrinsic value.
- PEG Ratio: 0.17 signals strong growth potential at a discounted valuation.
- Debt Profile: Debt-to-equity ratio of 7.10 is high but typical for housing finance firms.
- Momentum: RSI at 46.9 and MACD at 2.74 suggest neutral sentiment with potential for upside.
🏢 Business Model & Competitive Edge
- LIC Housing Finance (LICHSGFIN) is one of India’s leading housing finance companies with a strong retail and corporate loan portfolio.
- Backed by LIC, it benefits from brand trust, wide distribution, and access to low-cost capital.
- Focus on affordable housing and digital loan processing enhances scalability and customer reach.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹576) and DMA 200 (₹587), indicating a short-term downtrend.
- Suggested Entry Zone: ₹550–₹565 for accumulation on dips.
- Long-term holding is favorable given strong fundamentals and deep value metrics.
✅ Positive
- Low P/E and P/B ratios indicate undervaluation.
- Strong ROE and consistent EPS performance.
- High dividend yield of 1.76% adds income appeal.
⚠️ Limitation
- High debt-to-equity ratio typical of the sector but worth monitoring.
- Flat PAT growth may limit short-term upside.
- Minor decline in both FII and DII holdings.
📉 Company Negative News
- Stock has corrected ~12% from its 52-week high of ₹649.
- Volume spike may reflect short-term volatility or profit booking.
📈 Company Positive News
- Stable quarterly earnings and strong EPS of ₹100.
- Continued focus on affordable housing and digital transformation initiatives.
🏭 Industry
- Housing finance sector benefits from rising urbanization, government incentives, and growing middle-class demand.
- Industry P/E of 19.3 supports moderate valuation for established players.
🧾 Conclusion
- LIC Housing Finance is a fundamentally strong housing finance company trading at attractive valuation levels.
- Entry near ₹550–₹565 offers a compelling long-term opportunity for value investors.
- Monitor debt levels and institutional flows for sustained performance.
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