Pick of the weel (Feb 7)

LIC Housing Finance — Reduce Recommendation by HDFC Securities While LICHF’s operating performance was in line with estimates, (PPOP growth at 1.3/3.4%), earnings were ahead of estimates as provisioning continued to undershoot estimates. Over the years, non-core assets have contributed to a bulk of the portfolio growth, resulting in disproportionate risk (already reflecting in high developer NPAs). Furthermore, the company holds negligible provisions on early-bucket stressed assets. Potentially elevated provisions, coupled with stiff competition from banks in LICHF’s core business underpin our REDUCE rating (revised target price of INR 381).
Jubilant FoodWorks — Reduce We expect the recovery to gain pace in 4QFY21 and healthy growth in FY22. We maintain our EPS estimate for FY21/22/23. We value Jubilant at 50x P/E on Mar-23E EPS and derive a target price of Rs 2,204. We believe a large part of the recovery is priced in since the stock has run up sharply (40% in 6M). Maintain REDUCE.
Ujjivan Small Finance Bank — Sell Recommendation by Emkay Global Financial Services