LICHSGFIN Q2 FY24 earnings call.
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Revenue
₹6,753 Cr
verified against source
Revenue YoY
33%
reported change
EBITDA
Pending
latest reported figure
Source
screener in partial
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
LIC Housing Finance reported strong Q2 FY24 results with PAT of INR 1,188 crore (up 290% YoY), driven by 83% growth in NII to INR 2,107 crore and margin expansion to 3.04% from 1.78% YoY. Revenue from operations grew 33% to INR 6,753 crore. However, loan book growth remained subdued at 6% YoY (INR 2,77,987 crore) with total disbursements of INR 14,665 crore, down 13% YoY—management attributed this to technology system revamp disruptions that are now resolved. Stage 3 NPA improved to 4.33% from 4.90% YoY despite a INR 925 crore technical write-off. October sanctions showed 15-20% YoY growth, and management reiterated the 15-22% loan growth guidance for FY24 while guiding NIM normalization to 2.6-2.8% range. Project loan NPA remains elevated at ~35-40%, and PCR declined to 41% from 44%, raising questions about buffer adequacy. Key risk: margin compression as repricing normalizes and competitive intensity persists.
Colored figures show movement against the previous available record.
Guidance to track
- Management reiterated full-year guidance despite H1 underperformance. October sanction growth of 15-20% YoY signals acceleration in H2. Requires ~5% sequential quarterly growth to achieve midpoint.
- Current 3.04% expected to compress as Q1 was peak (3.41%). Repricing normalization and competitive intensity to pressure margins. Guidance range set vs. initial 2.4-2.55% estimate.
- Normalized credit cost guidance (excluding one-off INR 104 crore provision on repossessed assets). Further decline of 10-15bps expected in FY25-26 as recoveries improve.
- Current ROE at 16% with management focus on sustaining through improved ROAs and reduced credit costs (~25bps reduction YoY). Structural improvements cited.
Risks flagged
- Provision coverage ratio declined from 44% to 41% following Q2 write-offs. Management committed to reaching 50% but provided no timeline. Analyst Mohit Jain specifically questioned credit cost guidance; CFO attributed decline partly to write-off mechanics.
- MD acknowledged project loans as 'achilles heel' with ~40% NPA ratio. Legacy loans from 5+ years ago driving stress. Management remains selective but committed to continuing the segment. INR 400-500 crore resolution expected in Q3 from NCLT/OTS routes.
- Q2 saw INR 9,291 crore of customer repricing (vs. zero in Q1 due to tech issues), with ~200bps rate reduction. MD expects Q3 rewriting to normalize to INR 3,000-4,000 crore. Combined with high-yield builder loan prepayments, margins face sequential pressure.
- Balance transfers out were INR 2,300 crore vs. INR 1,200 crore inbound (~INR 1,100 crore net outflow). MD attributed part to technology-related servicing issues. Run rate has stabilized at 3-4% annualized but competitive pricing from banks remains a structural threat.
Key quotes
- Project loan has been our achilles heel, if I may say that, almost 40% NPL in the project loan side.
- The NIM is at 3.04% in the current quarter. Yes, 3.41% in Q1 was the peak... The guidance we had given you was in the region of 2.6%, 2.5%, 2.6%. Yes, I think I still maintain that guidance.
- This is a one-time one-off. We don't expect such charges in the subsequent quarters.
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