PL First Cut - LICHF Q1FY24

PL First Cut – LICHF Q1FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

LICHF Q1FY24-Mixed quarter; higher NII/NIM drove PAT beat of 10% but AuM growth and asset quality disappoint

--NII was better at Rs22.1bn (PLe Rs20.4bn) driven by higher NIM as loan growth was a miss

--NIM was ahead at 3.33% (PLe 3.06%) led by better loan yields at 10.1% (PLe 9.8%). Funding cost was 7.7%

--Loan growth was lower at 8.1% YoY (PLe 9%); disbursals were a miss at Rs108.6bn (PLe Rs133bn) offset by lesser repayments at Rs94.6bn (PLe Rs96.3bn).

--Individual growth was 9% YoY while project loans de-grew by 9% YoY

--Opex was a miss at Rs2.4bn (PLe Rs2.1bn) due to employee expenses and other opex

--PPoP was higher than 8% to PLe at Rs2bn (PLe Rs1.86bn) led by better NII

--Asset quality disappointed; stage-2/stage-3 increased QoQ by 49/55bps to 5.7%/5.0%.

--There was a 537mn write-back in stage-2 ECL while stage-2 ECL rose by Rs4.12bn QoQ probably due to write-offs

--Provisions were Rs3.6bn (PLe Rs3.75bn). PCR dipped QoQ from 44.4% to 42.2%.

--PAT beat estimates at Rs13.2bn (PLe Rs12.0bn).

--The stock trades at 0.8x FY25E ABV.