LIC Housing Finance Aims To Improve NPA To 2.6% By March

LIC Housing Finance Ltd. is on track to achieve a gross non-performing asset ratio of around 2.6% by the end of fiscal 2025 even after a “tightness” being observed in the December quarter on the collections front, according to the company’s Managing Director and Chief Executive Officer Tribhuwan Adhikari.

LIC Housing Finance posted a gross NPA of 2.75% in the quarter ended December 2024, improving from 3.05% in the previous quarter.

Talking to NDTV Profit, Adhikari said that asset quality was not a concern for his company.

“No concerns as far as asset quality is concerned. We are targeting an NPA ratio of around 2.5% to 2.6% by March. So, as far as the asset quality is concerned, we are doing well and we are very optimistic about dealing with it,” he said.

“As far as the gross NPAs and NPA margins are concerned, we are doing well quarter-on-quarter. There has been a decline in the gross NPA ratios,” Adhikari said.

However, there is a “slight tightness” being observed in terms of collections. The company’s net interest income fell 5% year-on-year to Rs 2,000 crore from Rs 2,097 crore in the third quarter last year. Despite the revenue drop, profit increased 23% to Rs 1,431.96 crore from Rs 1,162.88 in the same quarter a year ago.

“There is a slight tightness being witnessed as far as the collections are concerned. Delinquencies have not gone up, but stagewise movements have gone up. Stage one is slipping to stage two. There has been some increased notice in Q3,” the LIC Housing Finance CEO noted.

Certain problems in Hyderabad and Bengaluru affected the company’s growth in the third quarter, he mentioned.

“Q4 will be strong. But because of some problems in Hyderabad and Bangalore specifically, we have been pulled back to some extent in Q3,” Adhikari said.

“Now Q4 will be a good quarter. There's no doubt about that, as far as disbursements are concerned and AUM creation is concerned,” he added.

However, the company is likely to miss its double-digit growth guidance in terms of assets under management, which is now being pegged at 8.5%.

“We probably will miss the double digit guidance that we had given, and end the current fiscal at probably somewhere about 8-8.5%. That is why next year, 10-12% (AUM) would be a target which we would achieve,” Adhikari said.

Shares of LIC Housing Finance Ltd. closed 4.57% lower at Rs 557.95 apiece on the NSE on Monday, as compared to a 0.54% decline in the benchmark Nifty 50 index.