LIC HFC Q1 net profit rises 43% YoY at Rs 1,323.6 crore; NII up 39%

Net interest income sees an increase of 39 per cent, despite disbursements markedly declining in Q1 FY24

LIC Housing Finance Ltd reported a 43 per cent year-on-year (Y-o-Y) increase in net profit, reaching Rs 1,323.66 crore for the first quarter ending June 2023 (Q1FY24). The company attributed this growth to a strong performance in net interest income (NII) and improved margins.

LIC's NII for the reported quarter escalated by 39 per cent Y-o-Y, standing at Rs 2,209.44 crore compared to Rs 1,592.48 crore for the same quarter the previous year (Q1FY23). The company announced that its net interest margin (NIM) for the quarter reached 3.21 per cent, up from 2.51 per cent for Q1 FY23. Despite the positive report, LIC's stock closed 4.9 per cent lower at Rs 393.2 per share on BSE.

The individual home loan portfolio saw a 10 per cent Y-o-Y growth, rising to Rs 2,31,087 crore at the end of June 2023, up from Rs 2,09,599 crore a year earlier. On the contrary, the project loan portfolio contracted to Rs 11,321 crore as of June 30, 2023, down from Rs 12,443 crore as of June 30, 2022.

Overall, the total outstanding loan portfolio increased by 8.0 per cent Y-o-Y, reaching Rs 2,76,440 crore, up from Rs 2,55,712 crore the previous year.

Despite an expansion in the loan book on a Y-o-Y basis, the company witnessed a slowdown in disbursements for individual and project loans during the reported quarter. Total disbursements for Q1FY24 sharply declined to Rs 10,856 crore from Rs 15,202 crore in Q1FY23.

T Adhikari, LIC's newly appointed Managing Director & Chief Executive Officer, commented, "In the current financial year, our goal is to broaden our branch network into new regions to cater to increasing demand. We are witnessing a growth trend in all categories of our segments."

The company's provisions for expected credit loss (ECL) were recorded at Rs 7,590.68 crore as of June 30, 2023, a rise from Rs 6,141.03 crore as of June 30, 2022. Meanwhile, its gross non-performing assets (GNPAs) remained stable at 4.96 per cent at the end of June 2023.