Mehabe score: 6 G Factor: 5 Piotski Score: 3 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 3.
Description
LIC Housing Finance is engaged in the business of providing finance for purchase, construction, repairs, renovation of house/buildings.(Source : 201903 Annual Report Page No: 151)
Stock trades at 524.0, above its 50dma 455.58. It also trades above its 200dma 398.88. The stock remains bullish on techicals
The 52 week high is at 542.45 and the 52week low is at 255.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– ‘s median sales growth is 15.77% of last 10 years
Weakness
– has low interest coverage ratio.
Competition
– The industry trades at a mean P/E of 22.9x. AAVAS Financiers trades at the industry’s max P/E of 68.36x. LICHSGFIN trades at a P/E of 9.59x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 8.0. LICHSGFIN has a G-Factor of 5 and Piotski scoreof 3.
– Average 1 month return for industry is 31.7%. The max 1- month return was given by PNB Housing: a return of 102.59 %
Quarterly Results
Sales for period ended Dec 2020 is Rs 4911.0 cr compared to Rs 5005.0 cr for period ended Dec 2019, a fall of 1.9%
Operating Profits reported at Rs 348.0 cr for period ended Dec 2020 vis-vis 528.0 for period ended Dec 2019 .
Operating Margins contracted -346.3 bps for period ended Dec 2020 vis-vis Dec 2019 .
The EPS for Dec 2020 was Rs 14.29 compared to Rs 15.65 for previous quarter ended Sep 2020 and Rs 11.93 for Dec 2019
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 19835.0 cr for period ended TTM vis-vis sales of Rs 19740.0 cr for the period ended Mar 2020, a growth of 0.5%. The 3 year sales cagr stood at 10.1%.
Operating margins expanded to 3922.0% for period ended TTM vis-vis 3367.0% for period ended Mar 2020, expansion of 55500.0 bps.
Net Profit reported at Rs 2759.0 cr for period ended TTM vis-vis sales of Rs 2403.0 cr for the period ended Mar 2020, rising 12.9%.
Company recorded a healthy Net Profit CAGR of 11.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -14738.0 cr for period ended Mar 2020 vis-vis Rs -21538.0 cr for period ended Mar 2019
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 14.0% compared to 15.0% over the last 3 Years. – The stock has given a return of 94% on a 1 Year basis vis-vis a return of 2% over the last 3 Years. – The compounded sales growth on a TTM bassis is 2% vis-vis a compounded sales growth of 12% over the last 3 Years. – The compounded profit growth on a TTM basis is 3% vis-vis a compounded profit growth of 7% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2021 fii holding stood at 28.2% vis-vis 29.26% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 14.67% vis-vis 15.04% for Dec 2020
Conclusion
– ‘s median sales growth is 15.77% of last 10 years – has low interest coverage ratio.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 455.58 and is trading at 524.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
