LIC Housing Finance hits 10-month high on 43% YoY net profit growth in Q1

Shares of LIC Housing Finance soared 10 per cent to hit 10-month high of Rs 432 per share in Friday's intra-day trade, after the housing financier's net profit increased 43 per cent year-on-year (YoY) to Rs 1,323.66 crore for the June quarter of fiscal year 2023-24 (Q1FY24).
 

In the past one year, this non-banking financial services (NBFC) stock has surged 16 per cent, as against a 12 per cent jump in the S&P BSE Sensex.
 

The company's net interest income (NII) for the June quarter surged 39 per cent YoY to Rs 2,209.44 crore, while net interest margin (NIM) rose to 3.2 per cent in Q1FY24 (versus 2.5 per cent in Q1FY23).
 

Overall, the total outstanding loan portfolio increased 8 per cent YoY to Rs 2.7 trillion in Q1FY24. However, the company saw slowdown in disbursements for individual and project loans during the quarter.
 

Total disbursements declined 28.5 per cent YoY to Rs 10,856 crore in the recently concluded quarter.
 

On the asset quality front, stage 2 and 3 assets grew 110 basis points (bps) on a sequential basis to 10.7 per cent. Expected credit loss (ECL), meanwhile, rose 10 bps quarter-on-quarter (QoQ) to 2.7 per cent.
 

Analysts at Motilal Oswal Financial Services remain watchful of management's commentary on mortgage outlook, given tepid disbursement observed during the quarter.
 

"Commentary on the company's plans to scale up disbursements, NIM guidance, and credit costs for FY24 will be important to watch out for," they added, sharing a 'buy' rating on the counter.
 

The management, further, said that the company is seeing a growth uptick across all segments.
 

"In the current financial year our aim is to expand our branch network in newer geographies to match the increase in demand. Overall business indicators are positive despite high interest rates in the system," said T Adhikari, Managing Director & Chief Executive Officer of LIC Housing Finance.