Jefferies reduces target price for LIC Housing to Rs 700, stock up 3%

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The shares of LIC Housing Finance today surged 3% to an intraday high of Rs 573.65 on the BSE after the foreign brokerage firm Jefferies reaffirmed its ‘buy’ rating on the stock, albeit with a revised target price of Rs 700 (down from Rs 795 earlier), indicating a headroom of 25% growth potential.

The brokerage highlighted the company's stable margins on a quarter-on-quarter (QoQ) basis while acknowledging potential headwinds from future rate cuts.


A key positive noted by Jefferies is the provision reversal driven by the resolution of a wholesale account. This development has positively impacted the company's financials. The brokerage forecasts a 4% compound annual growth rate (CAGR) for earnings per share (EPS) and a return on equity (ROE) of 13-14% over the FY25-27 period.

Despite the positive outlook, Jefferies suggests that a meaningful re-rating of the stock would require a pick-up in growth and a better net interest margin (NIM) outlook.While the current performance is viewed favorably, the brokerage indicates that further improvement in these key areas is necessary for the stock to achieve its full potential.


Also read: Premier Energies shares zoom 10% as Q3 PAT surges 491% YoY

LIC Housing Finance share price performance


In the last one year, the shares of LIC Housing have experienced a decline of 9.64%. Year-to-date (YTD) performance shows a loss of 4.89%.Looking at shorter time frames, the asset has decreased by 6.29% over the past month, 8.35% over the last three months, and a substantial 23.70% over the past six months.

LIC Housing Finance target price


Out of 25 analyst recommendations on Trendlyne, 11 and 4 analysts recommend a ‘strong buy’ and a ‘buy’ rating on the stock respectively while 6 recommend holding it. Meanwhile, a total of 4 analysts have a ‘sell’ or a ‘strong sell’ view on the stock.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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