LIC Housing Finance (LICHSGFIN) Q1 2025 earnings summary

Executive summary

• Q1 FY25 revenue from operations was ₹6,783.67 crore, a marginal year-over-year increase, with a 4% growth in the loan portfolio to ₹2,88,665 crore.

• Individual home loan portfolio rose 7% year-over-year to ₹2,46,275 crore, comprising 85% of the total portfolio.

• Total disbursements increased 19% year-over-year to ₹12,915 crore, with individual home loan disbursements up 16% and project loan disbursements up 108%.

• Net interest income declined to ₹1,989.08 crore from ₹2,209.44 crore in Q1 FY24, mainly due to lower NPA recoveries and higher interest expenses; NIM fell to 2.76%.

• Profit after tax for Q1 FY25 was ₹1,300.21 crore, down 2% year-over-year, but up 19% sequentially from Q4 FY24.

Financial highlights

• Net interest margin for Q1 FY25 was 2.76%, down from 3.21% in Q1 FY24.

• Stage 3 exposure at default improved to 3.30% from 4.96% a year ago; provision coverage ratio on Stage 3 assets stood at approximately 50%.

• Technical write-off of ₹736.91 crore was made in the quarter.

• Cost of funds remained stable at 7.76% compared to March 2024.

• Return on average equity at 16% (down from 19%); return on average assets at 1.81% (down from 1.92%).

Outlook and guidance

• Management maintains double-digit portfolio growth guidance for FY25, despite Q1 growth of 4%.

• Margins are expected to remain within the guided range of 2.7%-2.9%, with Q1 seen as the bottom.

• Disbursement target for FY25 is ₹75,000 crore, up from ₹60,000 crore last year.

• Loan-to-value ratio on incremental sanctions at 51% for Q1 FY25; 99% of new loans are floating rate.

• Expectation of further write-offs of ₹400-500 crore in coming quarters.