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 (...