31 January 2019 LIC Housing Finances (LICHF) 3QFY19 PAT increased 26% YoY to INR5.7b (in- line), driven by stable loan growth and low base of last year. LAP) were up only 2% YoY to INR115b in the quarter, while corporate disbursements increased 27% YoY to INR12b. Loan book grew 3% QoQ/ 16% YoY to INR1.81t. Given the lower balance transfers due to the tight liquidity situation, repayment rate (annualized) declined meaningfully from 20% to 16% YoY. NII grew 41% YoY as the company recognized a net loss on modification of loans amounting to INR149m in 9MFY19 v/s INR1.6b in 9MFY18. We reiterate our thesis that the worst of spreads is behind us and LICHF should be able to maintain/improve spreads, going forward (refer to our Given 93% of loans are floating rate and 74% of borrowings are on fixed rate, spreads are likely to remain stable or improve.