LIC Housing Finance
BSE SENSEX
37,755
S&P CNX
11,343
14 March 2019
Update | Sector: Financials - NBFC
CMP: INR512
TP: INR600 (+17%)
Buy
Steady performance in a tough environment
Liquidity position well managed; Balance transfer pressure softens
Stock Info
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
Financials Snapshot (INR b)
2019E
Y/E March
NII
41.5
PPP
39.6
PAT
24.1
EPS (INR)
47.7
EPS Gr. (%)
21.1
BV/Sh (INR)
325
RoAA (%)
1.4
RoE (%)
15.6
Payout (%)
17.5
Valuations
P/E (x)
10.7
P/BV (x)
1.6
Div. Yield (%)
1.4
LICHF IN
505
258.4 / 3.7
583 / 388
11/8/-13
1013
59.7
2020E
48.6
46.2
28.3
56.1
17.7
371
1.5
16.1
17.5
9.1
1.4
1.6
2021E
56.2
53.5
32.9
65.2
16.2
425
1.5
16.4
17.5
7.9
1.2
1.9
Our strategist recently increased the weightage of LIC Housing Finance (LICHF) in
our model portfolio. In our view, after a span of two years, the business
environment is turning favorable for LICHF. With liquidity tightening, we expect
players with stronger parentage to disproportionately benefit v/s peers.
The benefit to such players will be two-fold; (a) they will have access to larger
quantum of capital from the debt markets at more competitive rates, and (b)
lower-rated peers would now be less aggressive, thus, reducing competition as
well as balance transfer pressure.
LICHF sailed through the past quarter with relative ease owing to its parentage
and granular balance sheet (94% of loans are to individuals). It raised INR200b
from NCDs, INR90b from CPs and INR10b from deposits in the quarter. While
core home loan growth was moderate, we expect it to accelerate over the
ensuing quarters.
The company has hiked its PLR five times in the past nine months, cumulating to
70bp. All retail loans are now at floating rate, so any increase in PLR will flow
through 93% of the loan book. We believe this should largely offset the rise in
cost of funds. Hence, spreads should be largely stable at 1.3-1.4% going forward.
At CMP, the stock trades at 1.4x FY20 BVPS – this is close to its decadal low of
1.1x. With steady-to-improving core home loan growth, stable spread and asset
quality, LICHF is set to deliver 1.5%/16% RoA/RoE over the medium term. Key
risks stem from the increasing GNPL ratio of the retail loan book. Maintain BUY
with a target price of INR600 (1.5x Dec 2020E BVPS).
Shareholding pattern (%)
As On
Dec-18
Sep-18
Promoter
40.3
40.3
DII
11.0
9.5
FII
28.8
30.8
Others
19.9
19.5
FII Includes depository receipts
Stock Performance (1-year)
LIC Housing Fin.
Sensex - Rebased
620
560
500
440
380
Dec-17
40.3
13.7
34.1
11.9
INR200b NCDs raised in 3Q; Balance transfers pressure softens
Even as NBFCs were recovering from the ILFS shock and the subsequent debt
market freeze in 3Q, recent events with respect to some corporate groups
have again added uncertainty in the market. In such a scenario, we believe (a)
overall supply of money from debt capital markets to the sector will remain
tight, leading to lower growth but rational competition for the sector as a
whole; and (b) lower-rated peers would now have lesser access to capital,
leading to lower balance transfers for the industry as a whole. As a result, we
believe good-quality NBFCs like LICHF will be more competitive, both in fund
raising, as well as in business as compared to peers.
This is proven from the
fact that LICHF was able to raise INR200b from NCDs in 3QFY19 alone. Also,
recent CP issuance data suggests that the company is now able to borrow
short-term money (<90-day CPs) at sub-7%– i.e. below pre-crisis levels. In
addition, balance transfers, which were at an all-time high in FY18, have
declined by 25% in 3QFY19.
Research Analyst: Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526
| Piran Engineer
(Piran.Engineer@MotilalOswal.com); +91 22 6129 1539
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
LIC Housing Finance
Fixed-to-floating rate re-pricing pressure behind as almost all retail loans
converted to floating rate
LICHF was unique in having a successful ‘fixed-to-floating’ product, wherein the
interest rate was fixed for the first three years and then converted to floating rate.
However, over the past two years, due to the declining interest rate scenario,
whenever these loans got converted to floating rate, it was a downward revision,
thus putting pressure on yields.
By 3QFY19, almost all such loans got converted,
resulting in hardly any such loans on the balance sheet. Hence, we do not expect
any incremental yield pressure from such ‘conversions’ going forward.
Recent yield hikes to negate CoF pressure; Spreads to remain stable
Over the past nine months, the company hiked its PLR by 70bp cumulatively
across five hikes.
Core home loan rate now starts at ~9.0% (non-annualized) while
that for LAP/developer is 100-200bp higher. Its home loan rates are competitive v/s
banks and peers like HDFC. Also, all retail loans are now at floating rate, which
implies that any PLR hike is passed on to 93% of the total loan book.
With the rates
hikes taken recently, we expect yield on loans to improve by 45-50bp over FY18-
20E.
On the other hand, given the liability structure, overall cost of funds for LICHF is
expected to increase only ~40bp cumulatively over FY18-20E, despite a sharp
increase in incremental cost of funds.
As a result, spread should be protected over
the medium term at 1.3% and should not witness any erosion hereon.
Increasing GNPL ratio a slight cause of worry
Over the past two years, LICHF’s GNPL ratio has more than doubled to 1.3%, with
retail lending (incl. LAP) GNPL ratio increasing from 0.3% to 0.9%. It is in line with
peers like HDFC (GNPL ratio of 1.2% with retail GNPL at 0.7%).
LICHF’s GNPL ratio
was the highest in the past decade. While it has historically had lower eventual
write-offs (average of 2bp), we still remain concerned about the rising GNPL trend
of the past two years.
Valuations near historical lows; Re-rating driven by strong profitability
Over the past two years, the valuation of LICHF has corrected from 2.5x PB (1-year
forward) to 1.4x currently. We believe the street is factoring in sustained spread
compression over the medium-to-long term. With its strong parentage and AAA-
credit rating since 2002, LICHF is better placed than peers. In addition, there are
initial signs of softening balance transfer pressure. Key risks to our earnings stem
from asset quality pressure and negative surprises from Ind-AS accounting (despite
it being three quarters, some numbers are still volatile).
Valuation at 1.4x FY20E
P/B is attractive and risk-reward is favorable, in our view.
We expect re-rating
driven by stable earnings growth over the next 4-8 quarters. Maintain BUY with a
TP
of INR600 (1.5x Dec 2020E BVPS).
Bull Case
In our bull case scenario, we assume core home loan growth to pick up to 15% YoY
and spreads to improve to 1.5% (v/s 1.3%) in the base case. This would result in
RoA/RoE of 1.7%/18%.
Accordingly, at a target multiple of 2.0x (Dec 2020 BVPS),
our TP would be INR800.
14 March 2019
2
 Motilal Oswal Financial Services
LIC Housing Finance
Competitive intensity softening
Repayment rate slowing down as balance transfers soften
Individual lending
repayment rate increased
from 13.3% to 18.6% over
FY13-18, crossing its FY06
peak of 17.8% in FY18.
Market share loss over the past few years driven by heightened
competition
Over the past five years, LICHF has lost market share in the core home loan
segment to new-age HFCs.
As per our analysis, LICHF’s market share declined
200bp from 10.9% to 8.9% over FY13-18.
Heightened competition manifested in terms of increased repayment rate.
Individual lending repayment rate increased from 13.3% to 18.6% over FY13-
18. Notably, it crossed the FY06 peak of 17.8% in FY18.
Exhibit 1: Repayment rate on individual loans above FY06 highs – points to increased
balance transfers out of LICHF’s books
17.8
15.1
13.5
13.2
14.9
14.5
17.4
13.9
18.6
17.3
12.7
13.3
13.8
Source: MOFSL, Company
Consequently, loan growth
slowed down from 18-19%
three years back to 10-11%
now
Exhibit 2: This led to slowing individual loan growth for LICHF (%)
34
22
21
22
38
28
19
25
18
19
10
9
11
Note: Numbers prior to FY16 include LAP too, however it was <5% of loans ; Source: MOFSL, Company
However, clear reversal of trend in 9MFY19
Over the past three quarters, the trend has been reversing. Individual loans
repayment rate of 15.3% (annualized) was the lowest in the past 14 quarters.
We expect this to provide some support to earnings growth going forward
14 March 2019
3
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 3: This led to slowing individual loan growth for LICHF (%)
Individual loan repayment
rate of 15.3% in 3QFY19
was the lowest in the past
14 quarters
Indiv loan repayments (INR b)
18.0
17.8
16.2
16.0
16.9
Indiv loan repayment rate (%)
17.9
18.8
18.3
17.0
16.8
16.2
15.3
Source: MOFSL, Company
We expect ‘value migration’
from smaller, new players
to the larger, established
players in the industry
Shake-up in the system to alter competitive scenario
With the recent industry-wide events playing out, we expect ‘value migration’
from smaller, new players to the larger, established players in the industry.
This would be driven by lower willingness of banks and mutual funds to lend to
the lesser established players in the industry, especially those without a strong
promoter or corporate backing.
Hence, growth rates for some of the smaller players would come off
meaningfully, while those for larger, well-established players would be largely
stable over the medium term.
Exhibit 4: Individual loan growth to be largely stable now and could even pick up from
current levels
Individual loans (INR b)
37.6
28.2
25.5
17.8
19.3
Growth (%)
15.2
14.2
13.8
12.2
12.2
12.9
Note: numbers include LAP too; Source: MOFSL, Company
14 March 2019
4
 Motilal Oswal Financial Services
LIC Housing Finance
Spreads to sustain in a difficult environment
70bp PLR hike since Mar ‘18
There are almost no
individual loans remaining
at fixed rate on the balance
sheet
70bp yield hike taken; All individual loans now at floating rate
Over the past three quarters, the company hiked its PLR by 70bp cumulatively
across four hikes. Core home loan rate now starts at 8.9% (non-annualized)
while that for LAP/developer is ~100-200bp higher.
The rates are competitive with banks, which have increased 1-year MCLR by an
average of 40bp over the same time period.
In 3QFY19, all the ‘fixed-to-floating rate’ loans eligible for conversion, were
converted during the quarter.
Hence, the yield pressure that resulted due to
these conversions over the past two years is now behind.
Exhibit 5: 1-year MCLR for banks – LICHF offers rates
competitive to most banks
Bank
SBI
ICICIBC
AXSB
HDFCB
PNB
BOB
KMB
1-year MCLR (%)
Mar-18
Feb-19
8.15
8.55
8.20
8.80
8.40
8.90
8.20
8.75
8.30
8.50
8.30
8.65
8.65
9.00
Source: MOFSL, Company
Exhibit 6: Yield to improve going forward (%)
10.6
10.7
10.6
10.5
10.3
10.0
9.5
9.7
10.0
Source: MOFSL, Company
With PLR hikes taken and
minimal refinancing impact
on NCDs, spreads should
stay put going forward
Minimal refinancing risk; Spreads at rock bottom
An analysis of the liability structure shows that LICHF still has a meaningful
chunk of relatively high-cost liabilities that are set to mature over FY19-20.
NCDs maturing in FY19 bear a weighted-average coupon rate of 8.46%, while
those in FY20 bear a weighted-average coupon rate of 8.32%.
Assuming refinancing of these NCDs as well as cost of new NCDs at 9.0%, the
impact of overall cost of funds is only 15-20bp each year.
As a result, we believe spreads have hit rock bottom and do not foresee any
further downside.
Short term CP rates below
7%
Incremental cost of funds has declined in the past two months
Over the past two months, CP rates have declined meaningfully to less than pre-
crisis levels. LICHF has been able to raise over INR120b since Oct’18, with recent
transactions at sub-7% for short term CPs.
The decline in long-term rates has been less, though. Cost of borrowing via NCDs
has declined 20-30bp over the past two months to 8.7-8.8% now.
14 March 2019
5
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 7: List of CPs raised in the past four months
Description
LIC HOUSING FINANCE LIMITED 83D CP 26DEC18
LIC HOUSING FINANCE LIMITED 80D CP 28DEC18
LIC HOUSING FINANCE LIMITED 91D CP 16JAN19
LIC HOUSING FINANCE LIMITED 90D CP 21JAN19
LIC HOUSING FINANCE LIMITED 181D CP 24APR19
LIC HOUSING FINANCE LIMITED 138D CP 12MAR19
LIC HOUSING FINANCE LIMITED 91D CP 28JAN19
LIC HOUSING FINANCE LIMITED 181D CP 02MAY19
LIC HOUSING FINANCE LIMITED 67D CP 08JAN19
LIC HOUSING FINANCE LIMITED 181D CP 28MAY19
LIC HOUSING FINANCE LIMITED 364D CP 28NOV19
LIC HOUSING FINANCE LIMITED 181D CP 28MAY19
LIC HOUSING FINANCE LIMITED 88D CP 15MAR19
LIC HOUSING FINANCE LIMITED 138D CP 12MAR19
LIC HOUSING FINANCE LIMITED 152D CP 12JUN19
LIC HOUSING FINANCE LIMITED 329D CP 12DEC19
LIC HOUSING FINANCE LIMITED 84D CP 12APR19
LIC HOUSING FINANCE LIMITED 58D CP 22MAR19
LIC HOUSING FINANCE LIMITED 364D CP 10FEB20
LIC HOUSING FINANCE LIMITED 88D CP 20MAY19
LIC HOUSING FINANCE LIMITED 337D CP 30JAN20
Issue Date
04/Oct/18
09/Oct/18
17/Oct/18
23/Oct/18
25/Oct/18
25/Oct/18
29/Oct/18
02/Nov/18
02/Nov/18
28/Nov/18
29/Nov/18
30/Nov/18
17/Dec/18
03/Jan/19
11/Jan/19
17/Jan/19
18/Jan/19
23/Jan/19
11/Feb/19
21/Feb/19
27/Feb/19
Amount (INR b)
10.0
7.5
10.0
10.0
7.0
2.0
10.0
10.0
4.0
5.0
4.5
2.5
10.0
8.0
10.0
5.0
7.0
7.0
7.5
5.0
10.0
Yield (%)
8.10
7.60
8.20
8.10
8.60
8.18
8.08
8.68
7.99
8.65
8.91
8.65
7.15
6.95
7.90
8.29
7.46
6.85
8.27
7.43
8.28
Source: MOFSL, Company
Exhibit 8: List of NCDs raised in the past four months
Date of issue Security Description (Short)
11.10.2018
25.10.2018
25.10.2018
25.10.2018
09.11.2018
09.11.2018
20.11.2018
20.11.2018
28.11.2018
04.12.2018
11.12.2018
11.12.2018
26.12.2018
26.12.2018
14.01.2019
22.01.2019
29.01.2019
14.02.2019
25.02.2019
06.03.2019
LICHF TR-365 9.08 NCD 10OT28 FVRS10LAC LOA
LICHF SR TR-367 OP-I 9.17 LOA 24MR22 FVRS10LAC
LICHF SR TR-367 OP-II 9.25 LOA 24SP20 FVRS10LAC
LICHF SR TR-367 OP-III 9.1 LOA 24SP28 FVRS10LAC
LICHF SR TR 368 OPT 1 9.19 LOA 060623 FVRS10LAC
LICHF SR TR 368 OPT 2 9.22 LOA 06DC19 FVRS10LAC
LICHF SR TR-369 OPT 1 9.1106 LOA 19JU20 FVRS10LAC
LICHF SR TR 369 OPT 2 8.97 LOA 17NV28 FVRS10LAC
LICHF SR TR 370 LOA 25FB22 FVRS10LAC
LICHF SR - TR 3 9.02 LOA 03DC20 FVRS10LAC
LICHF TRANCH 372 OPT1 8.75 LOA 08DC23 FVRS10LAC
LICHF TRANCH 372 OPT2 8.75 LOA 08DC28 FVRS10LAC
LICHF SR TR 373 OPT1 8.80 LOA 24DC20 FVRS10LAC
LICHF SR TR 373 OPT2 8.70 LOA 24DC25 FVRS10LAC
LICHF SR TR 374 8.6850 LOA 19AP22 FVRS10LAC
LICHF SR TRANCHE 375 LOA 18MY20 FVRS10LAC
LICHF SR TR 376 8.80 LOA 25JN29 FVRS10LAC
LIC HOUSING FINANCE LIMITED SR TR 377 8.40 LOA 13JL20 FVRS10LAC
LIC HOUSING FINANCE LIMITED SR TR 378 LOA 04MY22 FVRS10LAC
LIC HOUSING FINANCE LIMITED SR TR 379 OPT 1 8.45 LOA 12MR20 FVRS10LAC
Issue Size
(INR M)
5,000
2,500
2,500
2,500
3,000
5,000
20,000
2,749
3,000
3,000
4,000
4,000
3,000
5,000
4,500
5,000
3,000
7,500
3,000
10,000
Yield
(%)
9.08
9.17
9.25
9.10
9.19
9.22
9.11
8.97
ZCB
9.02
8.75
8.75
8.80
8.70
8.69
ZCB
8.80
8.40
ZCB
8.45
Maturity
Date
10/10/2028
24/03/2022
24/09/2020
24/09/2028
06/6/2023
06/12/2019
19/06/2020
17/11/2028
25/02/2022
03/12/2020
08/12/2023
08/12/2028
24/12/2020
24/12/2025
19/04/2022
18/05/2020
25/01/2029
13/07/2020
04/05/2022
12/03/2020
Source: MOFSL, Company
14 March 2019
6
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 9: 50bp CoF rise over FY18-20E (%)
Exhibit 10: Spreads to stay largely stable (%)
1.7
1.3
1.3
1.3
1.3
9.5
9.5
9.3
1.5
9.0
8.6
8.4
8.7
8.7
1.1
1.2
1.3
8.2
Source: MOFSL, Company
Source: MOFSL, Company
14 March 2019
7
 Motilal Oswal Financial Services
LIC Housing Finance
Key Risks
Declining interest rate cycle
Over the past month, a few banks have modestly cut MCLR. If other banks,
especially SBI and ICICI Bank, follow this trend, it could have a second-order impact
on incremental home loan yields for LICHF. This, in turn, would compress spreads
going forward.
Possibility of merger with IDBI Bank in the long term
LIC recently acquired 51% stake in IDBI Bank. With a 40% stake in LICHF, it is the
largest shareholder in both these entities. There could be an overhang of the
possibility of a merger of these two entities. However, if a merger weren’t to
happen, there are potential opportunities of loan cross-sell from IDBI Bank’s branch
network for LICHF.
Rising retail NPLs
Over the past two years, individual lending GNPL ratio increased from 32bp to 93bp.
If this trend sustains, our credit cost and PAT estimates could be meaningfully
impacted.
14 March 2019
8
 Motilal Oswal Financial Services
LIC Housing Finance
Valuation and view
Valuation close to medium-term lows despite 16%+ RoE
From 2HFY17 to 1HFY19, LICHF witnessed a continued decline in spreads, largely led
by pressure on yields. Spreads declined from a medium-term high of 1.9% in 4QFY17
to 1.3% in 1HFY19.
Consequently, its valuation corrected from 2.6x PB (1-year forward) to 1.2x.
However, spreads have been steady at 1.3-1.35% over the past three quarters despite
rising cost of funds. In our view, the street is factoring in further spread pressure.
However, we believe spread compression is behind and it should be stable/improve
going forward.
As evidenced in 3QFY19, availability of credit is not an issue for the company given the
parentage and credit rating. In fact, we believe that such times of tight liquidity would
make LICHF stand out among its peers.
Another advantage of parentage is the balance sheet leverage LICHF can assume. Its
leverage (assets/equity) of 12x is next only to GRUH Finance. Hence, despite a low RoA
of ~1.4%, LICHF manages to deliver 16%+ RoE.
Its RoE, despite a predominantly retail loan book, makes it an attractive play in the
HFC space. In addition, valuations at 1.4x FY20E P/B are attractive and risk-reward is
favorable, in our view.
We expect re-rating driven by stable earnings growth over the next 4-8 quarters. We
use RI model to value the company, with Rf = 7.5%, CoE = 13% and terminal growth
rate = 5%. Maintain BUY with a TP of INR600 (1.5x Dec 2020E BVPS).
Exhibit 11: DuPont analysis
Interest Income
Interest Expenses
Net Interest Income
Non interest Income
Fee Income
Treasury Income
Other Income
Net Income
Operating Expenses
Cost to income (%)
Employees
Others
Operating Profits
Provisions/write offs
PBT
Tax
Tax Rate (%)
PAT
Leverage (x)
RoE
FY13
10.89
8.65
2.24
0.29
0.23
0.09
-0.02
2.53
0.41
16.25
0.13
0.28
2.12
0.12
2.00
0.51
25.51
1.49
11.26
16.82
FY14
11.01
8.71
2.30
0.32
0.13
0.13
0.05
2.62
0.38
14.50
0.13
0.25
2.24
0.03
2.22
0.62
27.85
1.60
11.76
17.15
FY15
10.88
8.57
2.31
0.26
0.13
0.10
0.04
2.57
0.39
15.24
0.13
0.26
2.18
0.01
2.17
0.74
34.05
1.43
12.63
17.54
FY16
10.92
8.29
2.62
0.21
0.13
0.05
0.03
2.83
0.42
14.74
0.13
0.28
2.42
0.13
2.28
0.80
35.22
1.48
13.23
19.58
FY17
10.78
7.95
2.83
0.16
0.09
0.04
0.03
2.99
0.48
15.89
0.19
0.28
2.51
0.22
2.30
0.80
34.67
1.50
12.73
19.10
FY18
9.98
7.49
2.49
0.17
0.09
0.02
0.05
2.66
0.44
16.40
0.15
0.29
2.22
0.16
2.06
0.72
35.02
1.34
11.66
15.61
FY19E
10.04
7.61
2.42
0.14
0.09
0.00
0.04
2.56
0.25
9.68
0.14
0.11
2.31
0.37
1.94
0.53
27.50
1.41
11.12
15.64
FY20E
10.37
7.87
2.50
0.12
0.09
0.01
0.02
2.62
0.25
9.43
0.14
0.11
2.38
0.36
2.01
0.55
27.50
1.46
11.07
16.13
FY21E
10.46
7.90
2.56
0.12
0.09
0.01
0.02
2.68
0.25
9.23
0.14
0.11
2.43
0.37
2.07
0.57
27.50
1.50
10.93
16.38
Source: MOFSL, Company
14 March 2019
9
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 12: DuPont comparison – LICHF is competitive on RoE despite lower margins
FY20E, %
Interest Income
Interest Expenses
Net Interest Income
Non Interest Income
Net Income
Operating Expenses
Cost to income (%)
Operating Profits
Provisions/write offs
PBT
Tax
Tax Rate (%)
PAT
Leverage (x)
RoE
HDFC
10.04
7.03
3.01
0.20
3.21
0.50
15.51
2.72
0.10
2.62
0.84
32.00
1.78
8.58
15.27
LICHF
10.37
7.87
2.50
0.12
2.62
0.25
9.43
2.38
0.36
2.01
0.55
27.50
1.46
11.07
16.13
IHFL
12.80
7.94
4.87
0.97
5.84
0.97
16.62
4.87
0.25
4.62
1.20
26.00
3.42
7.58
25.90
PNBHF
9.49
7.54
1.95
1.11
3.07
0.71
23.22
2.35
0.36
1.99
0.64
32.00
1.36
12.36
16.76
Repco
11.45
7.06
4.39
0.24
4.62
0.88
19.03
3.74
0.16
3.58
1.22
34.00
2.37
7.17
16.97
Source: MOFSL, Company
Exhibit 13: PB chart (1-year forward) – LICHF is trading at 1 standard deviation below 10-year average
3.8
2.9
2.0
1.1
0.2
P/B (x)
Avg (x)
Max (x)
Min (x)
+1SD
-1SD
2.9
2.3
1.9
1.5
1.2
0.6
Source: MOFSL, Company
14 March 2019
10
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 14: HDFC PB chart (1-year forward)
8.0
6.0
4.0
2.0
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 15: IHFL PB chart (1-year forward)
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
4.7
3.7
5.9
5.1
4.5
4.0
2.4
4.3
2.7
1.7
0.7
2.3
3.6
3.0
1.5
1.6
1.0
Source: MOFSL, Company; Note: Subsidiary value not accounted for
Source: MOFSL, Company
Exhibit 16: PNBHF PB chart (1-year forward)
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
Exhibit 17: REPCO PB chart (1-year forward)
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
4.8
4.0
3.2
2.4
1.6
5.8
4.6
4.0
3.5
2.8
2.2
1.7
4.6
4.0
3.1
2.2
1.4
3.4
1.9
2.2
1.0
1.4
Source: MOFSL, Company
Source: MOFSL, Company
14 March 2019
11
 Motilal Oswal Financial Services
LIC Housing Finance
Valuation Matrix
66
Rating
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
FB
DCBB
SIB
Equitas
RBL
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
PNBHF
REPCO
Housing Finance
SHTF
MMFS
BAF
CIFC
SCUF
LTFH
MUTH
MAS
FY20E
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
Neutral
CMP Mcap
EPS (INR)
P/E (x)
BV (INR)
P/BV (x)
RoA (%)
RoE (%)
(INR) (USDb) FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E FY19E FY20E
388
36.4
7.7
20.2 37.2 14.1
166
181
1.7
1.6
0.5
1.2
4.7
11.8
2,223 87.3
79.8 95.9 27.9 23.2
543
621
4.1
3.6
1.8
1.8
16.7 16.5
740
27.4
18.5 39.6 39.9 18.7
266
301
2.8
2.5
0.6
1.2
7.2
13.9
1,271 34.7
37.9 46.1 33.5 27.5
303
348
4.2
3.7
1.7
1.7
12.1 13.3
250
8.1
18.5 22.6 13.5 11.0
126
145
2.0
1.7
1.2
1.2
15.5 16.7
1,683 14.2
68.8 100.2 24.5 16.8
441
556
3.8
3.0
1.7
2.1
16.5 20.2
90
2.6
6.1
8.9
14.7 10.2
67
75
1.3
1.2
0.8
1.0
9.5
12.5
200
0.9
10.2 13.2 19.7 15.1
96
109
2.1
1.8
0.9
1.0
11.6 13.4
15
0.4
1.7
2.7
9.1
5.7
29
31
0.5
0.5
0.3
0.5
5.6
8.6
135
0.7
6.8
9.5
20.0 14.2
73
81
1.9
1.7
1.5
1.6
9.7
12.4
637
3.9
20.6 28.0 30.9 22.8
176
199
3.6
3.2
1.2
1.3
12.3 14.9
291
84
92
117
262
83
37.6
4.6
2.3
4.4
2.8
1.4
6.6
-14.4
-24.4
8.9
17.0
4.5
30.0
8.0
3.7
15.7
42.3
12.8
38.7
-5.9
-3.8
13.2
15.4
18.5
8.9
10.5
24.8
7.4
6.2
6.5
247
112
127
165
448
235
272
120
128
179
484
245
1.0
0.8
0.7
0.7
0.6
0.4
1.0
0.7
0.7
0.7
0.5
0.3
0.1
-0.6
-0.9
0.3
0.2
0.1
0.6
0.4
0.2
0.5
0.4
0.3
1.8
-11.0
-15.0
5.3
3.5
2.1
11.5
6.6
2.7
8.8
8.2
5.5
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
1,958
512
702
889
453
1,246
427
2,809
1,363
1,749
143
595
536
47.1
3.7
4.3
2.2
0.4
4.2
3.8
23.4
3.1
1.7
4.2
3.4
0.4
42.8
47.7
95.9
66.0
38.8
49.6
54.9
110.2
78.0
44.4
21.6
10.7
7.3
13.5
11.7
11.5
19.7
41.1
17.4
12.1
12.5
12.2
18.9
18.6
9.3
6.4
11.4
10.2
9.3
15.8
31.5
15.4
11.1
10.8
10.4
16.4
307
325
396
435
244
693
172
329
394
949
66
228
154
343
370
446
496
285
808
191
408
473
1,089
78
268
179
3.0
1.6
1.8
2.0
1.9
1.8
2.5
8.5
3.5
1.8
2.2
2.6
3.5
2.7
1.4
1.6
1.8
1.6
1.5
2.2
6.9
2.9
1.6
1.8
2.2
3.0
1.8
1.4
3.2
1.5
2.3
2.4
2.3
3.8
2.5
3.5
2.3
5.8
4.9
1.9
1.4
3.5
1.4
2.3
2.7
2.3
3.7
2.3
3.6
2.2
6.0
4.6
15.6
15.6
25.7
16.1
17.2
16.8
13.2
22.8
21.8
16.3
18.8
23.2
19.8
15.3
15.8
26.2
16.8
16.8
17.8
14.9
24.2
20.4
15.5
18.5
23.0
19.6
108.7 133.3
21.7 27.0
68.3 89.1
78.1 88.4
144.2 158.0
11.5 13.3
48.9 57.1
28.4 32.6
*Multiples adj. for value of key ventures/Investments; For ICICIBC and HDFC, BV is adjusted for investments in subsidiaries
14 March 2019
12
 Motilal Oswal Financial Services
LIC Housing Finance
Financials and valuations
Income Statement
Y/E March
Interest Income
Interest Expense
Net Interest Income
Change (%)
Net Income
Change (%)
Operating Expenses
Operating Income
Change (%)
Provisions/write offs
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Proposed Dividend
2014
90,733
71,744
18,990
23.8
21,603
24.6
3,133
18,470
27.2
215
18,255
5,083
27.8
13,172
28.7
2,657
2015
105,467
83,102
22,364
17.8
24,749
14.6
3,885
20,864
13.0
-20
20,884
7,158
34.3
13,727
4.2
3,022
2016
122,509
93,068
29,441
31.6
31,787
28.4
4,687
27,100
29.9
1,465
25,636
9,028
35.2
16,608
21.0
3,333
2017
138,767
102,315
36,452
23.8
38,489
21.1
6,118
32,371
19.4
2,813
29,558
10,247
34.7
19,311
16.3
3,759
2018
148,260
111,247
37,013
1.5
39,483
2.6
6,475
33,007
2.0
2,389
30,619
10,723
35.0
19,896
3.0
3,998
2019E
171,900
130,403
41,497
12.1
43,889
11.2
4,250
39,640
20.1
6,409
33,231
9,138
27.5
24,092
21.1
4,210
(INR Million)
2020E
2021E
201,626
229,890
152,983
173,705
48,644
56,185
17.2
15.5
50,993
58,917
16.2
15.5
4,807
5,437
46,186
53,480
16.5
15.8
7,086
8,057
39,100
45,423
10,753
12,491
27.5
27.5
28,348
32,932
17.7
16.2
4,954
5,755
(INR Million)
2020E
2021E
1,010
1,010
186,401
213,578
187,411
214,588
1,872,647 2,120,568
12.5
13.2
2,060,057 2,335,156
14,210
17,052
20.0
20.0
2,152,467 2,451,524
13.5
13.9
1,021
1,031
-107,641
-134,451
2,060,057 2,335,156
Balance Sheet
Y/E March
Capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Total Liabilities
Investments
Change (%)
Loans
Change (%)
Net Fixed Assets
Net Current Assets
Total Assets
2014
1,010
74,319
75,329
820,356
19.3
895,685
1,993
-89.3
913,410
17.4
756
-20,474
895,685
2015
1,010
77,174
78,184
965,319
17.7
1,043,503
2,371
19.0
1,083,610
18.6
797
-43,275
1,043,503
2016
1,010
90,450
91,460
1,109,310
14.9
1,200,769
2,768
16.7
1,251,730
15.5
920
-54,649
1,200,769
2017
1,010
109,760
110,770
1,263,371
13.9
1,374,141
5,270
90.4
1,445,340
15.5
965
-77,434
1,374,141
2018
1,010
143,125
144,135
1,453,285
15.0
1,597,420
9,868
87.3
1,663,630
15.1
971
-77,049
1,597,420
2019E
1,010
163,007
164,017
1,664,530
14.5
1,828,547
11,841
20.0
1,896,901
14.0
1,001
-81,196
1,828,547
E: MOFSL Estimates; Note: FY19E onwards numbers are as per Ind-AS
14 March 2019
13
 Motilal Oswal Financial Services
LIC Housing Finance
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield on loans
Avg. Yield on Earning Assets
Avg. Cost-Int. Bear. Liab.
Int. Spread on Hsg. Loans
Net Int. Margin on Hsg. Loans
Profitability Ratios (%)
Adj RoAE
Adj RoAA
Int. Expended/Int.Earned
Other Inc./Net Income
Efficiency Ratios (%)
Fees/Operating income
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset-Liability Profile (%)
Loans/Borrowings Ratio
Debt/Equity (x)
Gross NPAs (Rs m)
Gross NPAs to Adv.
Net NPAs (Rs m)
Net NPAs to Adv.
2014
10.7
10.5
9.5
1.21
2.2
2015
10.6
10.3
9.3
1.25
2.2
2016
10.5
10.2
9.0
1.52
2.5
2017
10.3
10.0
8.6
1.7
2.7
2018
9.5
9.2
8.2
1.3
2.4
2019E
9.7
9.3
8.4
1.3
2.3
2020E
10.0
9.6
8.7
1.3
2.4
2021E
10.0
9.6
8.7
1.3
2.4
17.2
1.5
79.1
2.1
17.5
1.4
78.8
1.4
19.6
1.5
76.0
0.9
19.1
1.5
73.7
0.9
15.6
1.3
75.0
2.0
15.6
1.4
75.9
1.7
16.1
1.5
75.9
0.8
16.4
1.5
75.6
0.7
1.2
14.5
33.1
1.1
15.7
34.1
1.2
14.7
32.1
0.8
15.9
40.2
0.9
16.4
33.6
0.9
9.7
56.8
0.9
9.4
56.3
0.9
9.2
55.7
111.3
10.9
6,090
0.7
3,534
0.4
2014
149.2
16.2
26.1
28.7
4.5
112.3
12.3
4,947
0.5
2,344
0.2
2015
154.8
3.8
27.2
4.2
5.0
112.8
12.1
5,678
0.5
2,705
0.2
2016
181.1
17.0
32.9
21.0
5.5
114.4
11.4
6,271
0.4
2,053
0.1
2017
219.4
21.1
2.1
38.2
16.3
12.0
6.2
1.4
114.5
10.1
13,036
0.8
7,117
0.4
2018
285.4
30.1
1.6
39.4
3.0
11.6
6.8
1.5
114.0
10.1
24,682
1.3
11,107
0.6
2019E
324.8
13.8
1.6
47.7
21.1
10.7
7.2
1.4
114.9
10.0
28,475
1.3
12,814
0.6
2020E
371.1
14.3
1.4
56.1
17.7
9.1
8.4
1.6
115.6
9.9
32,780
1.3
14,751
0.6
2021E
424.9
14.5
1.2
65.2
16.2
7.9
9.8
1.9
Valuation
Book Value (INR)
Growth (%)
Price-BV (x)
EPS (INR)
Growth (%)
Price-Earnings (x)
Dividend Per Share
Dividend Yield (%)
E: MOFSL Estimates
14 March 2019
14
 Motilal Oswal Financial Services
LIC Housing Finance
Annexure
Exhibit 18: INR216b NCDs maturing in FY19 with a weighted average coupon of 8.46%
NCD
11500 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
8000 NCD's of Rs 1000000/- each
3500 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
2810 NCD's of Rs 1000000/- each
10250 NCD's of Rs 1000000/- each
4150 NCD's of Rs 10000000/- each
5000 NCD's of Rs 1000000/- each
3700 NCD's of Rs 1000000/- each
7000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
6500 NCD's of Rs 1000000/- each
7000 NCD's of Rs 1000000/- each
2730 NCD's of Rs 1000000/- each
7750 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5250 NCD's of Rs 1000000/- each
1550 NCD's of Rs 1000000/- each
7000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
4900 NCD's of Rs 1000000/- each
2050 NCD's of Rs 1000000/- each
2500 NCD's of Rs 1000000/- each
285 NCD's of Rs 10000000/- each
3000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
6600 NCD's of Rs 1000000/- each
3520 NCD's of Rs 1000000/- each
8500 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
4000 NCD's of Rs 1000000/- each
4380 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
2000 NCD's of Rs 1000000/- each
6000 NCD's of Rs 1000000/- each
Total
Weighted avg CoF of NCDs maturing
Date of
Maturity
28-03-19
25-03-19
08-03-19
28-02-19
27-02-19
26-02-19
12-02-19
08-02-19
22-01-19
22-01-19
16-01-19
21-12-18
17-12-18
06-12-18
20-11-18
15-11-18
01-11-18
25-10-18
21-10-18
15-10-18
08-10-18
27-09-18
27-09-18
14-09-18
12-09-18
07-09-18
06-09-18
05-09-18
25-08-18
14-08-18
13-08-18
27-07-18
04-07-18
29-06-18
27-06-18
27-06-18
22-06-18
20-06-18
11-Jun-18
28-May-18
22-May-18
15-May-18
14-May-18
27-Apr-18
27-Apr-18
9-Apr-18
Coupon
7.90%
9.65%
9.76%
8.40%
8.38%
9.77%
7.20%
8.65%
9.60%
9.63%
9.73%
7.56%
8.70%
8.69%
7.51%
6.92%
9.65%
9.55%
9.60%
7.07%
8.38%
11.15%
8.18%
8.70%
7.20%
8.45%
6.95%
9.60%
9.60%
7.51%
11.08%
8.60%
8.83%
7.18%
7.00%
6.98%
8.70%
8.60%
8.40%
8.34%
8.31%
8.73%
8.65%
8.30%
7.25%
9.11%
8.46%
Source: MOFSL, Company
Amount
(INR m)
11,500
5,000
8,000
3,500
3,000
2,810
10,250
4,150
5,000
3,700
7,000
5,000
3,000
5,000
6,500
7,000
2,730
7,750
5,000
5,000
5,000
1,250
5,250
1,550
7,000
3,000
5,000
1,250
5,000
5,000
3,000
4,900
2,050
2,500
2,850
3,000
5,000
6,600
3,520
8,500
3,000
4,000
4,380
5,000
2,000
6,000
8.50%
-69
58
101
-4
-4
36
-133
6
55
42
86
-47
6
9
-65
-111
31
81
55
-72
-6
33
-17
3
-91
-2
-78
14
55
-50
77
5
7
-33
-43
-46
10
7
-4
-14
-6
9
7
-10
-25
37
-95
Refinance impact (INR m) at
9.00%
9.50%
-127
-184
33
8
61
21
-21
-39
-19
-34
22
8
-185
-236
-15
-35
30
5
23
5
51
16
-72
-97
-9
-24
-16
-41
-97
-130
-146
-181
18
4
43
4
30
5
-97
-122
-31
-56
27
21
-43
-69
-5
-12
-126
-161
-17
-32
-103
-128
8
1
30
5
-75
-100
62
47
-20
-44
-3
-14
-46
-58
-57
-71
-61
-76
-15
-40
-26
-59
-21
-39
-56
-99
-21
-36
-11
-31
-15
-37
-35
-60
-35
-45
7
-23
-1,178
-2,260
14 March 2019
15
 Motilal Oswal Financial Services
LIC Housing Finance
Exhibit 19: INR222b NCDs maturing in FY20 with a weighted average coupon of 8.32%
NCD
5950 NCD's of Rs 1000000/- each
2200 NCD's of Rs 1000000/- each
2200 NCD's of Rs 1000000/- each
2200 NCD's of Rs 1000000/- each
6500 NCD's of Rs 1000000/- each
2500 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
2050 NCD's of Rs 1000000/- each
2000 NCD's of Rs 1000000/- each
8000 NCD's of Rs 1000000/- each
4500 NCD's of Rs 1000000/- each
3500 NCD's of Rs 1000000/- each
10000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
7150 NCD's of Rs 1000000/- each
16650 NCD's of Rs 1000000/- each
5500 NCD's of Rs 1000000/- each
6000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
7700 NCD's of Rs 1000000/- each
10000 NCD's of Rs 1000000/- each
3500 NCD's of Rs 1000000/- each
2500 NCD's of Rs 1000000/- each
10000 NCD's of Rs 1000000/- each
11750 NCD's of Rs 1000000/- each
5750 NCD's of Rs 1000000/- each
10000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
6000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
3000 NCD's of Rs 1000000/- each
5000 NCD's of Rs 1000000/- each
2000 NCD's of Rs 10000000/- each
13000 NCD's of Rs 1000000/- each
4100 NCD's of Rs 1000000/- each
3950 NCD's of Rs 1000000/- each
7500 NCD's of Rs 1000000/- each
2000 NCD's of Rs 1000000/- each
Total
Weighted avg CoF of NCDs maturing
Date of
Maturity
30-03-20
19-03-20
18-03-20
17-03-20
28-02-20
21-02-20
18-02-20
14-02-20
11-02-20
21-01-20
14-01-20
14-01-20
19-12-19
18-12-19
12-12-19
28-11-19
22-11-19
18-11-19
08-11-19
29-10-19
18-10-19
03-10-19
30-09-19
10-09-19
30-08-19
28-08-19
19-08-19
24-07-19
12-07-19
26-06-19
19-06-19
13-06-19
13-06-19
21-05-19
17-May-19
15-May-19
10-May-19
30-Apr-19
23-Apr-19
5-Apr-19
Coupon
8.68%
7.80%
7.80%
7.80%
7.58%
7.77%
8.02%
8.48%
7.97%
8.47%
8.75%
8.73%
8.61%
7.90%
7.96%
8.72%
7.93%
8.59%
8.70%
8.97%
8.35%
8.37%
9.24%
9.45%
9.44%
7.90%
9.35%
9.51%
7.59%
8.69%
7.07%
8.60%
8.37%
7.40%
8.69%
7.81%
7.79%
8.28%
7.09%
8.69%
8.32%
Source: MOFSL, Company
Amount
(INR m)
5,950
2,200
2,200
2,200
6,500
2,500
5,000
2,050
2,000
8,000
4,500
3,500
10,000
3,000
3,000
7,150
16,650
5,500
6,000
5,000
7,700
10,000
3,500
2,500
10,000
11,750
5,750
10,000
5,000
3,000
6,000
3,000
3,000
5,000
2,000
13,000
4,100
3,950
7,500
2,000
Refinance impact (INR m) at
8.50%
9.00%
11
-19
-15
-26
-15
-26
-15
-26
-60
-92
-18
-31
-24
-49
0
-11
-11
-21
-2
11
8
11
-18
-16
16
-95
5
12
24
-12
-13
26
24
94
-71
49
101
-46
6
-86
3
-4
-55
4
-89
-29
-9
-106
4
-403
-42
-11
-9
-39
-33
-31
-20
-178
-23
-18
-1
-50
-63
8
11
44
-130
20
51
-71
-9
-116
-12
-19
-80
-6
-154
-50
-28
-144
-6
-1,512
9.50%
-49
-37
-37
-37
-125
-43
-74
-21
-31
-82
-34
-27
-89
-48
-46
-56
-261
-50
-48
-27
-89
-113
-9
-1
-6
-189
-9
1
-96
-24
-146
-27
-34
-105
-16
-219
-70
-48
-181
-16
-2,620
14 March 2019
16
 Motilal Oswal Financial Services
LIC Housing Finance
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the
inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd.
(NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) for its stock broking
activities & is Depository participant with Central Depository Services Limited (CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual
Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Securities Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
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Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
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to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together
with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment
services provided by MOSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to
"Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only
available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the
U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct
business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International
Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
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SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
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Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
****************************************************************
****************************************************************
14 March 2019
17
 Motilal Oswal Financial Services
LIC Housing Finance
The associates of MOSL may have:
-
financial interest in the subject company
-
actual/beneficial ownership of 1% or more securities in the subject company
-
received compensation/other benefits from the subject company in the past 12 months
-
other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on
the specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL
even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
-
acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
-
be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
-
received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
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instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as
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Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
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the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or
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The person accessing this information specifically agrees to exempt MOSL or any of its affiliates
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Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980
4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080
1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-38281085.
Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412.
AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual
Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd.
is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate
products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
14 March 2019
18