LIC Housing Finance Q3 Results Review - Good Quarter On Margins, Asset Quality: Yes Securities

Yes Securities Report

LIC Housing Finance Ltd.'s delivered net interest income/pre-provision operating profit/profit after tax beat of 4%/6%/3% on our estimates, notwithstanding

1. muted growth performance,

2. augmentation of ECL coverage and

3. one-off provision on alternative investment fund exposure.

The operational performance was buoyed by margin resilience and asset quality improvement.

Loan portfolio grew by modest at 1.2% QoQ/4.8% YoY with overall disbursements at Rs 151 billion (7% below expectation) and portfolio run-off being higher. Home Loan lumpsum pre-payment rate was elevated for second consecutive quarter.

Home Loan disbursements were only marginally higher than preceding quarter (despite major festive season falling in Q3 FY24), reflecting gradual stabilization after significant changes in operational structure and tech/systems.

Management was also averse to being aggressive at the cost of margins and asset quality.

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