Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

<ul>
<li>LICHF reported weaker than expected NIM due to lower than usual recoveries, however, adjusted for it, NIM was as expected. FY25 NIM is on track as per the 2.7-2.9% guided.</li>
<li>Weak growth of 4% YoY was the biggest negative surprise; however, this is just random quarterly variation rather than any structural slowdown. LICHF is expecting 10%+ YoY growth for FY25. </li>
<li>Asset quality has been improving consistently. Q1FY25 Stage-3 assets declined to 3.30% vs 4.96% YoY and 3.31% QoQ. Stage-2 assets declined to 4.06% vs 5.74% YoY and 4.20% QoQ.</li>
</ul>


LICHF reported weaker than expected NIM due to lower than usual recoveries, however, adjusted for it, NIM was as expected. FY25 NIM is on track as per the 2.7-2.9% guided.
Weak growth of 4% YoY was the biggest negative surprise; however, this is just random quarterly variation rather than any structural slowdown. LICHF is expecting 10%+ YoY growth for FY25. 
Asset quality has been improving consistently. Q1FY25 Stage-3 assets declined to 3.30% vs 4.96% YoY and 3.31% QoQ. Stage-2 assets declined to 4.06% vs 5.74% YoY and 4.20% QoQ.


LICHF: On Track for a Strong FY25, Despite Weaker than Expected Q1

<ul>
<li>LICHF faced some teething issues with technology during past 1Y due to which growth and reported asset quality had been subdued. However, with strong Q4FY24, LICHF is back on track.</li>
<li>LICHF reported strong growth in disbursements. Q4FY24 disbursements were INR 18200cr+, a growth of 20%+ QoQ. NIM came in higher than expected at 3.15%, despite spike in bond yields.</li>
<li>Asset quality improved significantly with Stage 3 assets declining to 3.31% vs 4.26% QoQ and Stage 2 assets declining to 4.20% vs 4.54% QoQ.</li>
</ul>


LICHF faced some teething issues with technology during past 1Y due to which growth and reported asset quality had been subdued. However, with strong Q4FY24, LICHF is back on track.
LICHF reported strong growth in disbursements. Q4FY24 disbursements were INR 18200cr+, a growth of 20%+ QoQ. NIM came in higher than expected at 3.15%, despite spike in bond yields.
Asset quality improved significantly with Stage 3 assets declining to 3.31% vs 4.26% QoQ and Stage 2 assets declining to 4.20% vs 4.54% QoQ.


LIC Housing Finance (LICHF): Back on Track | All Set for a Strong FY25

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lic-housing-finance-ltd" target="_blank" data-smartkarma-citation="entities:15667:1" rel="noopener">LIC Housing Finance (LICHF)</a> reported a strong Q3FY24 on the back of a strong NIM. Growth, however, has been tepid as LICHF recently transitioned its technology and organizational structure.</li>
<li>FY24 has been a consolidation year due to technology and organizational changes; however, LICHF is setting up well to post strong growth in FY25.</li>
<li>Among other things, affordable housing is going to be a key growth area going forward. Asset quality has been also improving and should further normalize with recoveries and upgradations.</li>
</ul>



LIC Housing Finance (LICHF) reported a strong Q3FY24 on the back of a strong NIM. Growth, however, has been tepid as LICHF recently transitioned its technology and organizational structure.
FY24 has been a consolidation year due to technology and organizational changes; however, LICHF is setting up well to post strong growth in FY25.
Among other things, affordable housing is going to be a key growth area going forward. Asset quality has been also improving and should further normalize with recoveries and upgradations.


LICHF: FY24 PAT Is on Track to Be Strong | FY25 Will Be a Year of Robust Growth

<ul>
<li>LICHF reported a decent Q2FY24 led by a strong NIM (3.04%). Growth has been somewhat subdued due to technical issues, however, these have been resolved and October is tracking well.</li>
<li>LICHF reiterated its full-year FY24 NIM guidance at 2.6-2.8%. Credit cost, except for one-off item of INR 104cr in Q2FY24, continues to be below 50bp annualized.</li>
<li>Despite a subdued H1FY24, LICHF has maintained its FY24 AUM growth guidance to 10%+. This implies that LICHF can grow AUM at 5%+ QoQ over the next two quarters.</li>
</ul>


LICHF reported a decent Q2FY24 led by a strong NIM (3.04%). Growth has been somewhat subdued due to technical issues, however, these have been resolved and October is tracking well.
LICHF reiterated its full-year FY24 NIM guidance at 2.6-2.8%. Credit cost, except for one-off item of INR 104cr in Q2FY24, continues to be below 50bp annualized.
Despite a subdued H1FY24, LICHF has maintained its FY24 AUM growth guidance to 10%+. This implies that LICHF can grow AUM at 5%+ QoQ over the next two quarters.


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Bajaj Housing Finance / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-housing-finance" target="_blank" data-smartkarma-citation="entities:43675:1" rel="noopener">Bajaj Housing Finance (BHF IN)</a> raised around US$800m in its India IPO.</li>
<li>BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.</li>
<li>In our previous notes, we looked at the company’s past performance and valuation. In this note, we will talk about the trading dynamics.</li>
</ul>



Bajaj Housing Finance (BHF IN) raised around US$800m in its India IPO.
BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
In our previous notes, we looked at the company’s past performance and valuation. In this note, we will talk about the trading dynamics.


Bajaj Housing Finance IPO - Valuation Might Get Stretched from Demand Overflow

India

LIC Housing Finance Limited provides housing finance services to individuals for purchase, construction, repair and renovation of new or existing flats and houses. The Company also provides finance on existing property for business, personal needs and gives loans to professionals for purchase, construction of clinics, nursing homes, diagnostic centers, and office space throughout India.

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LIC Housing Finance (LICHF IN)

LICHF: On Track for a Strong FY25, Despite Weaker than Expected Q1

LICHF is on track for a strong FY25 despite weaker than expected Q1. At the current valuation, it has potential to more than double over a holding...

Ankit Agrawal, CFA

LIC Housing Finance (LICHF): Back on Track | All Set for a Strong FY25

LICHF is back on track after some operational challenges over the past 1Y. At the current valuation, an investment in LICHF has potential to more...

Ankit Agrawal, CFA

LICHF: FY24 PAT Is on Track to Be Strong | FY25 Will Be a Year of Robust Growth

LICHF reported a decent Q3FY24 lead by a healthy NIM. We have upgraded FY24E PAT to INR 4500cr+. FY24 has had tepid growth due to transitions but...

Ankit Agrawal, CFA

LICHF: H2FY24 Guided to Be Strong

LICHF is available at a cheap valuation of <8x P/E based on our FY24 estimated PAT. At the current valuation, an investment in LICHF has potential...

Ankit Agrawal, CFA

Bajaj Housing Finance IPO - Valuation Might Get Stretched from Demand Overflow

Bajaj Housing Finance (BHF IN) raised around US$800m in its India IPO. In this note, we talk about the trading dynamics.

Sumeet Singh

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