LIC Housing Finance Q1 Results Review - Focus On Non-Housing; Margins Subdued: Nirmal Bang

Nirmal Bang Report

LIC Housing Finance Ltd.’s Q1 FY25 reported set of numbers for net interest income / pre-provision operating profit were lower versus our estimates (-7.0% / -6.5%). Profit after tax saw a beat of 4% due to controlled opex and provisions.

Despite strong disbursements, loan book growth was sluggish (4% YoY). The company is confident of maintaining a double-digit growth in FY25; we build in ~11%.

Q1 FY25 net interest margin stood lower at 2.76% (in line with guidance of 2.7%-2.9%). We anticipate a better trend in subsequent quarters aided by lower cost of fund in H2.

Asset quality was stable with Gross Stage 3 at 3.30%. Expect additional resolutions to come through in FY25.

We adjust our estimates, factoring in lower NIM in Q1. Roll forward our valuation to Jun-26 with a multiple of 1.1x Jun-26 adjusted book value per share (in line with the five-year average) resulting in a target price of Rs 750. Maintain Accumulate.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.