LIC Housing Finance (LICHSGFIN) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue from operations rose 4% year-over-year to INR 7,057 crores, with PAT up 23% to INR 1,431.96 crores and outstanding loan portfolio increasing 6% to INR 299,144 crores.

• Asset quality improved, with Stage III exposure at 2.75% versus 4.26% a year ago; technical write-offs of INR 174 crores and sale of stressed assets for INR 250 crores were executed.

• Disbursements were impacted by external issues in Bangalore and Hyderabad, but Hyderabad has normalized and Bangalore is expected to recover in Q4; overall loan disbursements grew 2% year-over-year to INR 15,475 crores.

• The company launched a new affordable housing product, expected to drive future growth and margins.

• Unaudited standalone and consolidated financial results for Q3 and nine months ended December 31, 2024, were approved and reviewed by the Board and Audit Committee.

Financial highlights

• Net interest income for Q3 was INR 2,000 crores, down from INR 2,097 crores year-over-year; net interest margin stood at 2.70%, down from 3% a year ago.

• Profit before tax increased 24% year-over-year to INR 1,793.44 crores.

• Total provisions at quarter-end were INR 4,974 crores, with a provision coverage of about 48% on Stage III assets.

• EPS (standalone) for Q3: INR 26.03, up from INR 21.14 YoY; return on average equity improved to 17%.

• Capital adequacy ratio at 21.49% as of December 2024, with Tier I at 20.00%.

Outlook and guidance

• Q4 is expected to be strong, with guidance for double-digit loan growth in FY26 and 10%-15% disbursement growth.

• Asset quality is expected to further improve, with more large-ticket resolutions anticipated.

• Margins are expected to benefit from a recent 10 bps PLR hike and a growing affordable housing portfolio.

• Weighted average cost of funds increased to 7.78% in Q3 FY25 from 7.70% in Q3 FY24; yield on advances declined to 9.73% from 9.97%.

• No deviations or variations in the use of funds raised; all proceeds utilized as disclosed.