LIC Housing Finance Ltd. share price target

LIC Housing Finance (LIC HF) continues to feel the heat from increasing competition, as reflected in AUM growth remaining subdued at 7% YoY / 1% QoQ and asset yield reducing 20bps YoY / QoQ to 9.6% in Q1FY26.

stage-3 saw a 15bps QoQ blip leading to higher provisions at 25bps (PLe 18bps). Disbursal growth was muted due to slower pass thru of rate cuts compared to banks and lower demand post repo cuts. While company maintained its double digit AuM growth guidance for FY26, we are cautious and factoring 7.2% AuM CAGR over FY25-27E since (1) competition from banks...

LIC Housing Finance’s (LICHF) 1QFY26 PAT grew ~5% YoY to ~INR13.6b (in line). NII in 1QFY26 rose ~4% YoY to ~INR20.7b (in line). Fee and other income grew 170% YoY to INR1.2b.

LICHF’s 4QFY25 PAT grew ~25% YoY to ~INR13.7b (~7% beat). FY25 PAT grew ~14% YoY to INR54.3b. 4Q NII declined ~3% YoY to ~INR21.7b (~6% beat).

LICHF saw a good quarter as PAT was a 7.2% beat since (1) NII was 8.5% ahead due to 16bps QoQ increase in NIM driven by reduction in funding cost and (2) provisions were lower due to 28bps QoQ reduction in stage-3 to 2.5%. Reported NIM for FY25 was 2.7% (3.1% in FY24) and despite likely repo cut of 75-100bps company sees NIM for FY26 to range between 2.6-2.8% as PLR would be trimmed only after repo cut translates to lower funding cost. However, we are factoring a NIM of 2.55% in FY26 given increased competition from banks in a falling rate...

LICHF’s 3QFY25 PAT grew ~23% YoY to ~INR14.3b (~12% beat). NII declined ~5% YoY to ~INR20b (in line).

LICHF's 1QFY25 PAT declined ~2% YoY to ~INR13b (in line). NII declined ~10% YoY to ~INR19.9b (8% miss).

Individual home loan disbursement improved in Q4FY24 after a decline in the past five quarters. Moreover, recently announced measure of additional 3 crore house construction under PMAY scheme is potentially positive

LIC Housing Finance’s (LICHF) Q2FY24 financial performance appears subdued as reflected in 10% QoQ decline in PAT. The management has been able to hold better-than-guided profitability with RoA sustaining at 1.7% vs guidance level of 1.3-1.4% in FY24.

LIC Housing Finance (LICHF) reported a strong 12% QoQ growth in its Q1FY24 PAT at INR 13.2bn – largely driven by robust 11% QoQ NII growth. NII growth was led by NIM expansion of 28bps QoQ and supported by: 1) the cumulative PLR hikes by 210bps during FY23, followed by another hike of 25bps in Q1FY24, and 2) by superior liability management with 50% of the liabilities being at fixed rate.