LIC Housing Fin. (LICHSGFIN)

FairStock Score: 64/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter LIC holds 45.24%, lending stability and long-term institutional backing
• Trades at a steep discount to book: P/B of 0.83 with price ₹545.55 vs BV ₹660.87
• P/E of 5.39 and Graham Number of ₹1,217.57 indicate a wide margin of safety
• ROE of 15.09% shows the lending franchise still earns decent returns on equity
• Dividend yield of 1.86% provides some income while waiting for value to be recognised

Concerns

• High leverage with Debt/Equity of 7.45 leaves little room for credit stress or rising rates
• Growth is weak: sales up 4.33% and profit only 1.63% with a PEG of 22.00
• Free cash flow is deeply negative at ₹-17,548 Cr and Piotroski F-score is just 5/9
• Altman Z-score of 0.55 signals financial fragility, though it must be interpreted cautiously for a finance company

AI Analysis

Let me look at LIC Housing Finance the way I would any business: what does it earn, how does it fund itself, and what am I paying relative to its intrinsic worth. At ₹545.55, the stock trades at 0.83 times book value of ₹660.87 and only 5.39 times earnings. That is a Graham-style margin of safety, especially when the Graham Number works out to ₹1,217.57, implying a 55.83% discount. But cheapness alone never makes a great investment. The company earns a respectable 15.09% ROE, so capital is not being wasted. Yet growth is distinctly sluggish: sales up only 4.33% and profit up just 1.63%. That tells me this is a slow grower in a sector where I would expect much stronger compounding. The PEG of 22.00 confirms that the market sees very little growth, and the EV/EBITDA of 994.33 is meaningless for a leveraged lender, but it does highlight how dependent the business is on debt. Financial health is the real test. Debt-to-equity of 7.45 is high, and free cash flow is deeply negative at ₹-17,548 Cr, though bank-like cash flow statements can deceive. The Piotroski score of 5/9 is mediocre, and the Altman Z-score of 0.55 would alarm me in an industrial company, though it is less reliable for housing finance. LIC's 45.24% promoter stake gives institutional comfort, and the 1.86% dividend yield provides a modest return while I wait. I would not rush in; I want proof of better loan growth, stable asset quality, and improving leverage before calling this a wonderful business at an attractive price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer