LIC Housing has been a marquee name in the housing finance business over the last 20 years and has been responsible along with HDFC for developing the housing finance market in India in a big way.

How the results of LIC Housing Finance panned out?

For the March quarter, LIC Housing Finance reported a 17% rise in net profits to Rs.694 crore. Net interest income (NII) of the company was up by 21% at Rs.1201 crore showing good traction on the top line. Even the net interest margins (NIM) for the quarter showed a slight improvement to 2.54% from 2.45% last year. The only concern for LIC Housing in its latest quarter could be that the gross NPAs have gone up sharply from 0.78% to 1.53% on more aggressive bad loans recognition. In line with its philosophy, the company has increased its share of individual loan disbursement and cut down on its project disbursements.

Should you look to buy LIC Housing Finance at current prices?

The company has been in a range since the time the HFCs ran into problems late last year. However, LIC Housing has the advantage of not being vulnerable to maturity mismatch risk, which is the challenge for most of the other HFCs in India. If you think that 1.53% gross NPAs is a worry, then valuations are very reasonable at just about 10X earnings on a historical basis. That gives good margin of safety on the stock. One can look to accumulate the stock from a medium to long term exposure to the fast growing housing finance segment in India.