'Most inexpensive stock': Here are share price targets for LIC Housing Finance 

LIC Housing Finance Ltd has strong moats in retail mortgages and on the liability side; and that the housing finance company has demonstrated its ability to transmit higher borrowing costs to customers, analysts said. Post its March quarter results, a couple of brokerages said the risk-reward is turning favourable on the counter. Analysts largely have price targets in the range of Rs 600-790 on the stock.

Motilal Oswal said high competitive intensity and lower support from recoveries in the interest income can lead to a contraction in net interest margin (NIM) in FY25. But it sees far better earnings predictability in LIC Housing Finance, as the asset quality continues to improve through resolutions of stressed exposures. 

"Risk-reward is favorable at 0.9 times FY26 P/BV. We reiterate our Buy rating with a target price of Rs 790 (premised on 1.1x FY26E P/BV)," Motilal Oswal said. The brokerage said LIC Housing's valuation of reflects the frequent one-offs in expenses and NIM volatility. It estimated return on asset (RoA) of 1.6 per cent and return on equity (RoE) of 14 per cent in FY26. 

LIC Housing's re-rating hinges on higher loan growth, said Prabhudas Lilladher. This brokerage has upped its target price on the stock to Rs 660 from Rs 540 but retained its ‘Hold' rating.

Nirmal Bang said while cost of borrowings continues to be elevated due to the ongoing liquidity crunch, LIC Housing has been able to pass on the rise in benchmark rates to the end customer. It has been able to re-negotiate liabilities at a lower cost and has collected the interest component on the resolution of some high-ticket cases in Q4, Nirmal Bang said.

"The company expects to maintain NIMs of 2.7-2.9 per cent in FY25; we expect NIMs to trend better with the expectation of a rate-cut in H2FY25," it said. 

This brokerage has adjusted its estimates factoring in higher NIMs and significant asset quality improvement. "We expect a loan book CAGR of 13 per cent over FY24-FY26E and expect ROA/ROE at 1.6 per cent/15 per cent for FY26E. Maintain an ACCUMULATE rating on LICHF; however we ascribe a higher multiple of 1.2 times March 2026 ABVPS resulting in a target price of Rs 700," it said.

Nuvama has tweaked its earnings estimates and rolled over the base to FY26E, yielding a target of Rs 605 against Rs 540 earlier. 

"LICHF remains the most inexpensive stock in our NBFC universe trading at 0.9x BV FY26E and has limited downside potential. However, given high quarterly earnings volatility, soft loan growth, likely pressure on incremental NIM and frequent accounting changes, we do not see upside triggers; ‘HOLD," Nuvama said.