LIC Housing Finance · Material risks, their source context, and severity in the latest available quarter.
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Risk intelligence
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.
