LIC Housing Finance share price surges 13% as Q3 PAT rises to Rs 767 crore

LIC Housing Finance share price jumped over 13 percent in the morning session on January 28, a day after the company declared its December quarter results.

The mortgage lender reported a 6 percent increase in profit after tax at Rs 767.33 crore for the quarter ended December 2021, aided by higher collections and drop in provisions. It had reported a profit after tax of Rs 727.04 crore in the same period of the previous fiscal.

"The income levels were more or less maintained. Our collections were good during the three months of the quarter. Recovery also picked up across all the regions.

"Even the provisions were less in the quarter because of the provisions we had made earlier," the company's Managing Director and CEO Y Viswanatha Gowd said.

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The lender reported better growth in the quarter due to higher disbursements during the festive season.

The LIC Housing Finance shares was trading at Rs 393, up Rs 47.65, or 13.80 percent at 11:05 hours on BSE. It has touched an intraday high of Rs 393.50 and an intraday low of Rs 356.75.

The scrip was trading with volumes of 436,784 shares, compared to its five day average of 265,013 shares, an increase of 64.82 percent.

Net interest income (NII) grew 14 percent to Rs 1,455 crore, as against Rs 1,281 crore for the same period in the previous year. Net interest margin (NIM) improved to 2.42 percent as against 2.36 per cent. Gowd expects Q4 NIM to be at around 2.50 percent.

Morgan Stanley has an underweight rating on the stock with target at Rs 345 per share, a 13 percent downside from current level.

"The company's PPoP of 15% was ahead of estimates, driven by stronger NII. Profit was in-line given higher provisions towards new RBI norms. We await management commentary on asset quality and sustainability of NIM," it said.