LIC Housing Finance Trades 56% Below Graham Number

LIC Housing Finance trades at ₹500 on NSE, close to 56% below its Graham Number of ₹1,217.57. The stock carries a 4.79 P/E and a FairStock Score of 72. On that arithmetic, it's one of the stronger names on the Graham screen. But the market isn't always stupid. Sometimes it's early. Sometimes it's wrong. At 4.79x trailing earnings, investors are paying almost nothing for future profit. That's either a gift or a warning. Graham Math, Not Graham Religion Benjamin Graham's formula uses book value and earnings. For NSE: LICHSGFIN, trailing EPS is roughly ₹104.38. Book value per share sits near ₹631. The math gives ₹1,217.57. At ₹500, the stock implies one of two things. Earnings will reset lower, or book value carries hidden rot. Asset quality has been stable, not clean. Gross NPA ratio has bumped around 4% in recent periods. That's not fatal for a housing finance company, but it's not pristine either. The discount starts to look more rational when you stress the book. The Graham formula takes the square root of 22.5 times EPS times book value. That multiplier embeds a P/E of 15 and a P/B of 1.5. LICHSGFIN trades at 4.79x earnings and 0.79x book. Both sit far below the formula's embedded expectations. That's not a screen failure. It's a market repricing. Sector Repricing Hits Housing Finance Higher rates compress HFC margins. [LIC Housing Finance](/stock/LICHSGFIN) has a lower cost of funds than most small peers, but net interest margin stays stuck near 3%. That's thinner than [Can Fin Homes](/stock/CANFINHOME). It's below what the old housing finance model once produced. Compare the valuation. [PNB Housing Finance](/stock/PNBHOUSING) gets a higher multiple without clearly better growth. The market has preferred private HFCs with lower ticket sizes and faster AUM turnover. LICHSGFIN's book skews toward developer loans and salaried mortgages. Both are fine businesses. Neither is exciting. That explains part of the discount. AUM growth has been mid-single digits f...