Fact based stock research
LIC Housing Finance (NSEI:LICHSGFIN)

INE115A01026

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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LIC Housing Finance stock research in summary

lichousing.com

ANALYSIS: With an Obermatt Combined Rank of 14 (worse than 86% compared with investment alternatives), LIC Housing Finance (Thrifts & Mortgage Finance, India) shares have lower financial characteristics compared with similar stocks. Shares of LIC Housing Finance are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 14, is a sell recommendation based on LIC Housing Finance's financial characteristics. As the company LIC Housing Finance's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 12), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 65% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	65
Growth Rank	29
Safety Rank	12
Combined Rank	14

Country	India
Industry	Thrifts & Mortgage Finance
Index	Good Governace Growth Markets
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: LIC Housing Finance

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	32	87	77	65
GROWTH
GROWTH	9	39	55	29
SAFETY
SAFETY	11	1	7	12
SENTIMENT
SENTIMENT	n/a	15	31	^new
360° VIEW
360° VIEW	n/a	11	33	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better LIC Housing Finance is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	32	87	77	65
GROWTH
GROWTH	9	39	55	29
SAFETY
SAFETY	11	1	7	12
COMBINED
COMBINED	8	29	37	14

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of LIC Housing Finance the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), LIC Housing Finance shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for LIC Housing Finance. Price-to-Profit (also referred to as price-earnings, P/E) is 84 which means that the stock price compared with what market professionals expect for future profits is lower than for 84% of comparable companies, indicating a good value concerning LIC Housing Finance's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 73, which means that the stock price is lower as regards to invested capital than for 73% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 68% of alternatives (only 32% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 58% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, is a buy recommendation based on LIC Housing Finance's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	34	43	46	32
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	24	93	84	84
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	52	85	80	73
DIVIDEND YIELD
DIVIDEND YIELD	26	59	55	42
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	32	87	77	65

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of LIC Housing Finance; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), LIC Housing Finance shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for LIC Housing Finance. Sales Growth has a below market rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors. The same is valid for Capital Growth, with a rank of 20, and Profit Growth, with a rank of 36. Currently, professionals expect the company to grow its profits less than 64% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 83, which means that the stock returns have recently been above 83% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for LIC Housing Finance, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	30	69	10	28
PROFIT GROWTH
PROFIT GROWTH	n/a	12	86	36
CAPITAL GROWTH
CAPITAL GROWTH	n/a	81	61	20
STOCK RETURNS
STOCK RETURNS	48	25	63	83
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	9	39	55	29

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of LIC Housing Finance.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 12 (better than 12% compared with alternatives), the company LIC Housing Finance has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of LIC Housing Finance is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for LIC Housing Finance. Liquidity is at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 44, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 56% of its competitors. Leverage is also high at a rank of 1, which means that the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 12 (worse than 88% compared with alternatives), LIC Housing Finance has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	2	1	1	1
REFINANCING
REFINANCING	60	41	33	44
LIQUIDITY
LIQUIDITY	9	15	48	66
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	11	1	7	12

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of LIC Housing Finance and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	40	43	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	52	53	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	33	^new
MARKET PULSE
MARKET PULSE	n/a	20	26	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	15	31	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for LIC Housing Finance.
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