HSBC mentioned multiple potential catalysts for the stock, including firmer interest rates, the possibility of a repo rate hike, faster loan disbursements, and easing bond yields.
It said that any of these triggers could lead to a sharp re-rating in the stock.ALSO READ | Explained – What is aiding the up to 13% surge in HEG and Graphite India shares
The brokerage pointed out that India is currently near the bottom of its interest rate cycle, with bond yields still elevated relative to the repo rate.While its base case assumes no change in the repo rate, HSBC said LIC Housing Finance could be a key beneficiary if expectations shift towards a rate hike.
The brokerage has raised its FY26-28 earnings estimates by 3-4%, factoring in a firmer rate environment.
HSBC also flagged attractive valuations, citing that the stock is trading near all-time lows and at a 38% discount to its five-year average.
Given its secured loan book, comfortable capital position, and AAA credit rating, the brokerage sees limited downside risk at current levels.
Shares of LIC Housing Finance were trading about 1% higher at ₹500.55. The stock has declined around 7% over the past month.
