LIC HOUSING FINANCE LTD - Quantamental Equity Research

Quantamental Equity Research on LIC HOUSING FINANCE LTD | Release: 02 Dec 2018 02:52:56 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:LICHSGFIN and BSE CODE:500253
Last Close:  INR 466.35
Fair Value:  INR 466.45
Est. Price by Mar 19:  INR 513
Market Capitalization (INR Crs):  23534.35
Industry:  Housing Finance 
Rating:  BUY
Upside:  10%
Company Profile
LIC Housing Finance is one of the largest Housing Finance companies in India, with the key objective of providing longterm finance to individuals for the purchase or construction of a house or a flat for residential purposes. The Company also provides finance on an existing property for business or personal needs, and also gives loans to professionals for buying their office space and equipment.
Growth Per Share
Particulars 1-Year 3-Year 5-Year  
Revenue % 7% 53% 114%  
EBIT % 8% 36% 94%  
Earnings % 3% 44% 94%  
Book Value %  15% 62% 96%  
Stock Total Return %  -14% 24% 141%  
Share holding pattern
Particulars %age   
(A) Promoter & Promoter Group 40.31  
(B) FII/FPI 36.50  
(C) DII/Insurance Companies 9.47  
(D) Public holding < 2 lakhs of cap. 8.06  
(E) Others 5.66  
Grand Total 100.00  
Fundamentals (Historical and Estimated)
Particulars Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18  Mar-19 E   Mar-20 E   Mar-21 E   Mar-22 E   Mar-23 E   
Price 178 228 263 229 261 445 471 641 552 513 535 547 550 541  
Return on Equity 20% 23% 16% 16% 17% 18% 18% 17% 16% 14% 13% 12% 11% 10%  
Price to Earning  12.8 11.1 14.5 11.3 10.0 16.2 14.3 16.8 14.0 12.6 12.6 12.6 12.6 12.6  
EVTI 12.1 11.5 11.1 10.5 10.2 11.0 10.8 11.2 11.4 11.1 11.0 10.9 10.8 10.7  
EVTIFM 12.8 11.1 14.5 11.3 10.0 16.2 14.3 16.8 14.0 12.6 12.6 12.6 12.6 12.6  
Price to Book Value 2.5 2.6 2.3 1.8 1.7 2.9 2.6 2.9 2.2 1.8 1.7 1.5 1.4 1.3  
Debt to Equity  10.3 10.8 9.9 10.6 10.9 12.3 12.1 11.4 11.5 11.3 11.0 10.7 10.3 9.9  
Dividend Yield 2% 2% 1% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1%  
Cash Flow to Firm -18% -13% -8% -6% -4% -1% -1% 0% -1% 1% 2% 3% 5% 6%  
Detailed Estimates
Title Mar-18 Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
Sales     15,051.29     16,821.22     18,515.04     20,066.54     21,408.95     22,479.40  
EBITDA     14,196.50     15,713.15     17,295.38     18,744.68     19,998.67     20,998.60  
EBIT     14,186.52     15,701.99     17,284.20     18,733.65     19,988.91     20,989.96  
PBT       3,061.87       3,124.06       3,257.16       3,332.65       3,346.80       3,295.98  
NPAT       1,989.59       2,062.19       2,150.05       2,199.88       2,209.22       2,175.68  
Price to Earning             14.00            12.55            12.55            12.55            12.55            12.55  
Price to Book Value              2.20              1.80              1.67              1.53              1.40              1.26  
Debt to Equity             11.45            11.25            10.99            10.67            10.30              9.87  
Return on Equity              0.16              0.14              0.13              0.12              0.11              0.10  
Enterprise Value to Total Income (EVTI)            11.42            11.10            11.00            10.89            10.78            10.67  
Enterprise Value to Total Income to Firm Margin(EVTIFM)            18.72            18.08            17.92            17.74            17.56            17.37  
Price or Est. Share Prices          552.04          513.00          534.90          547.30          549.65          541.35  
DISCOUNTED CASH FLOW
Title Mar-19 E Mar-20 E Mar-21 E Mar-22 E Mar-23 E  
PBT       3,124.06       3,257.16       3,332.65       3,346.80       3,295.98  
Interest     12,577.93     14,027.04     15,401.00     16,642.11     17,693.98  
Depreciation            11.15            11.18            11.03              9.76              8.64  
Cash Flow Before Tax     15,713.15     17,295.38     18,744.68     19,998.67     20,998.60  
Tax Rate            33.99            33.99            33.99            33.99            33.99  
Cash Flow After Tax     10,372.25     11,416.68     12,373.36     13,201.12     13,861.17  
Terminal Cash Flow                                                                                    -     268,046.22  
Total Cash Flow     10,372.25     11,416.68     12,373.36     13,201.12   281,907.40  
Present Value of Cash Flow   237,324.74  
Debt   213,787.03  
Value of Equity     23,537.71  
Fair Value Per Share          466.45  
Equity          23,534
Debt        145,328
Beta Take from Reuters 1.61
Risk Free Rate Prevailing Yield in India 8%
Market Risk Premium Assuming 8.82% premium for Equity Investments 9%
Interest Paid          11,125
Tax Benefit            3,896
Interest Net of Tax            7,229
Debt        145,328
Cost of Debt 5%
Cost of Equity 22%
Debt Weight 86%
Equity Weight 14%
WACC 7%
Cash Flow of Mar-23 E     13,861.17
Growth 1.8%
Present Value of Terminal Cashflow   268,046.22
Peer Comparision
# Name CMP Rs. Mar Cap Rs.Cr.  B.V. Rs. Annualized ROE % ROCE % Latest EVTI Latest EVTIFM CMP / BV P/E Debt / Eq Div Yld % Growth Rate R % SGR % Ann Total Income PQEIOI QoQ Sales % Qtr Sales Var % QoQ Profits % Qtr Profit Var % Graham's Number Rs.
   1  H D F C        1,989.00        341,662          412.17            19.60              9.65            13.99            21.16              4.83            34.10              5.21              0.98            14.20        -160.32          45,028                 -                 139            13.05            24.91            12.65            24.71
   2  Indiabulls Hous.           715.60          30,534          362.53            38.24            11.43              7.12            10.62              1.97              7.14              8.21              5.73            20.86        -206.53          17,021            16.87                 40              2.32            26.13            -1.31            21.43
   3  LIC Housing Fin.           466.35          23,534          251.48            22.66              9.60              9.81            13.81              1.85            10.84            11.45              1.46            18.75        -118.98          16,810            40.31                 41              3.73            11.92              0.92            11.54
   4  GRUH Finance           296.70          21,730            22.69            37.91            10.77            18.54            28.29            13.08            50.15            10.23              0.56            25.30        -137.02            1,922            57.86               206              6.27            15.45            -8.36            20.05
   5  PNB Housing           906.50          15,181          376.60            16.44              9.48              9.25            15.29              2.41            17.23              8.57              0.99            13.47        -292.74            6,922            32.79                 73              7.09            35.79          -11.40              9.58
   6  H U D C O             43.00            8,608            52.80            14.45              8.06              8.96            15.01              0.81              8.59              3.68              1.28            12.46        -509.98            4,932            89.81                 31          -23.80            27.67          -15.37              6.24

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