Mumbai: Brokerages have cut target price on LIC Housing Finance after the company reported a 39% decline in its March quarter profit.

Nomura has downgraded the stock to neutral from buy and cut target price to Rs 305 from Rs 540.

HSBC has maintained hold rating with and cut target price to Rs 285 from Rs 295. Investec has maintained buy rating and cut target price to Rs 310 from Rs 540. Haitong Securities has maintained sell rating and cut target price to Rs 240 from Rs 365.

“Q4FY20 earnings for LIC Housing Finance indicate structural weakness. While provisions stood much lower than expectations despite pandemic challenges, 25% of the book stood under moratorium,” said Prabhudas Lilladher, which has maintained reduce rating on the stock with a target price of Rs 253.

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“Profitability will remain impaired for LIC Housing Finance, and weak capital levels limit its ability to absorb any negative surprise on credit cost, in our view. Moratorium trends also remain weak, with 25% of loans (by value) under moratorium as on May-end, and more importantly, around 70% of builder book under moratorium by customers is a clear negative despite a sharp increase in non-performing assets in FY20,” said Nomura, which has downgraded the stock.

Shares of LIC Housing Finance ended up 1.6% at Rs 272.90 on Tuesday.



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