LIC Housing Finance Targets Double-Digit Loan Book Growth In FY26

LIC Housing Finance Ltd., one of India's leading housing finance companies, is targeting a double-digit loan book growth in the financial year 2025-26, according to Managing Director and CEO Tribhuwan Adhikari. It will be backed by an expected pick-up in retail disbursements during the third and fourth quarter.

“Q3 and Q4 are the two quarters where we really show a good growth, better growth than Q1 and Q2.  The home loan book has been doing satisfactorily, I would not say excellently. We hope that in Q3 and Q4, the retail loan book will do even better. I am confident that the guidance of double-digit growth of the loan book we had given at the beginning of the year, we'd be able to meet that,” he said in an interview with NDTV Profit on Thursday. 

LIC Housing Finance reported a modest 6% growth in its Assets Under Management (AUM) for the second quarter.

However, it fell short of the company's internal expectations. The company had anticipated closer to 8% AUM growth in Q2, according to Adhikari.  

“The AUM growth was at 6% at the end of the quarter, and we were expecting it to be slightly better. We expected to be closer to 8% by the end of this quarter,” he said. 

Adhikari attributed the slowdown primarily to lacklustre performance in the construction finance segment, alongside balance transfer outflows triggered by aggressive rate cuts from banks.

He highlighted that banks linked to the repo rate have swiftly repriced both new and existing loans following recent repo rate reductions. In contrast, LIC Housing Finance's prime lending rate (PLR) is not directly tied to the repo, requiring deliberate board-level decisions on adjustments.

“Our rates are dependent on our PLR, which is not linked to the repo, so we have to take a conscious call on how far we can reduce it,” the top executive said.

While it did cut its lending rates by 25 basis points in April, it was not enough to stop the outflow.

"Which probably took off 1.5% of the loan growth that we expected," Adhikari conceded.

Shares of LIC Housing Finance closed at Rs 572 apiece, down 3.61%, on the NSE, while the benchmark Nifty50 ended 0.68% lower at 25,877.85.