LIC Housing Finance (LICHSGFIN) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 revenue from operations rose 7% year-over-year to INR 7,233 crore, with PAT up 5% to INR 1,359.92 crore and the loan portfolio growing 7% to INR 309,587 crore.

• Individual home loans comprised 85% of the loan book, with disbursements in this segment at INR 11,247 crore and overall loan disbursements up 2% to INR 13,116 crore.

• Net interest income increased 4% year-over-year to INR 2,066 crore, while net interest margin declined to 2.68% from 2.76% a year ago.

• Unaudited standalone and consolidated financial results for Q1 FY26 were approved with no material misstatements noted by auditors.

• The company reduced new home loan rates by 50 bps to 7.50% following RBI's repo and CRR cuts, aligning with competitive market rates.

Financial highlights

• Standalone Q1 revenue from operations: INR 7,233 crore, up from INR 6,784 crore YoY; net profit after tax: INR 1,359.92 crore, up from INR 1,300.21 crore YoY.

• Net interest income for Q1 FY26 at INR 2,066 crore, up 4% year-over-year; net interest margin at 2.68%, down from 2.76% YoY.

• Cost of funds reduced to 7.50% from 7.76% a year ago; incremental cost of funds dropped to 6.97%.

• Return on average equity at 15%; capital adequacy ratio at 24.72%.

• Impairment on financial instruments increased 35% to INR 192.87 crore.

Outlook and guidance

• Management maintains double-digit growth guidance for the year but will reassess after Q2.

• Q2 and subsequent quarters are expected to see improved disbursements and growth, especially during the festival season.

• Focus remains on protecting margins and maintaining asset quality amid intense competition.

• Loan portfolio CAGR over last 5 years at 7%; profit after tax CAGR at 19%.

• Final dividend for FY2024-25 to be paid post-AGM approval, with August 22, 2025 as record date.