LIC Housing Fin overall spreads to remain flat
Posted on 10th July 2018 |
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| LICHF has underperformed NIFTY by 48% and peer HFCs by 10-80% in last 12 months, due mainly to pressure on incremental spreads. Historically, LICHF has been more sensitive than peer HFCs to incremental mortgage spreads, leading to the larger de-rating. While incremental mortgage spreads have remained under pressure for some more time, we now see value in LICHF, as: Back book assets reprice faster than liabilities – LICHF is different in this cycle with +70% floating loans vs 40-45% floating loans in last cycle; improving core mortgage trend; with a 50% de-rating from the peak, valuations at 1.4x FY20 book are undemanding with +15% growth CAGR and at least 16-17% ROEs. Our revised TP of Rs 600 is based on 1.75x June-20F book. LICHF’s individual mortgage book is now 75% floating rate vs 35-40% floating in the last cycle when rates spiked (CY13). With +85% of funding in bonds vs 65% in last cycle (fixed rate liability), the existing book repricing should have a favourable impact on NIMs and aid in offsetting the pressure seen on incremental mortgages . So while we believe that incremental spread pressure will remain for FY19F, the back book repricing should help offset the negative from lower incremental spreads. Thus, we now expect overall spreads to remain flat at ~140bps over FY19-20F. With stable spreads, we expect LICHF’s ROEs of ~17% and with ~15% CAGR growth expectations, valuations at 1.4x FY20 book is undemanding. Incrementally, core mortgage growth trend for LICHF has improved and on a system level demonetisation/ GST/RERA drags on mortgage growth are behind. In CY2013, LICHF multiples cracked to 1.1-1.2x 1 year fwd book but given the higher share of floating rate assets now, we expect spreads and multiples to hold up better for LICHF in this cycle. Improvement in liquidity situation should spread further and could lead to upside medium to long term. |
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Bharti Airtel defers Q2 results till Nov 14 over ambiguity on AGR verdict
Posted on 29th October 2019 |
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Bharti Airtel said on Tuesday it has postponed its second-quarter earnings report to mid-November, as the wireless operator sought clarity on the court ruling asking telecom firms to cough up overdue payments to the government.
Shares of the company, which was expected to release its quarterly numbers later in the day, dropped 3.3 per cent in early trade. |
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Rupee slips 8 paise vs US dollar in early trade amid drop in oil prices
Posted on 7th October 2019 |
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The rupee on Monday opened eight paise lower at 70.96 against the US dollar amid drop in crude oil prices and rise in Asian equities. The domestic unit on Friday closed almost flat at 70.88 against after the Reserve Bank of India (RBI) in a widely expected move cut key interest rates by 0.25 percentage point. On a weekly basis, the local unit slumped by 32 paise. |
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LIC pips private insurers in first-year premium growth during April-August
Posted on 13th September 2019 |
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In the first five months of the current financial year, first-year premiums of life insurance companies grew by 39.84% (year-on-year) at Rs 1.05 lakh crore as compared to Rs 75,588.35 crore in April-August of 2018-19. Life Insurance Corporation of India (LIC) continued to grow at a faster pace compared to private insurance players, shows the data from the Insurance Regulatory and Development Authority of India (Irdai). |
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Apollo Hospitals rules out further stake sale
Posted on 13th September 2019 |
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Apollo Hospitals Enterprise (AHEL) has ruled out further dilution of promoters’ stake in the company. The company also said its Rs 1,337-crore stake sale of Apollo Munich Health Insurance with mortgage major HDFC will be concluded by October. Following these stake sales, the promoters’ pledged position will come down from a high of 76% to 54% by October and eventually to 20% by November or December, company sources said here. |
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World trusts India on Kashmir, not us: Pakistan minister Ijaz Ahmed Shah
Posted on 13th September 2019 |
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In a major embarrassment for Pakistan and its Prime Minister Imran Khan, the country's Interior Minister Ijaz Ahmed Shah, a retired brigadier, said the international community didn't believe Pakistan's narrative on Kashmir; instead it is India whose version is trusted. |
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