LICHSGFIN Q3 FY25 earnings call.
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Revenue
₹7,057 Cr
verified against source
Revenue YoY
4%
reported change
EBITDA
Pending
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
LIC Housing Finance delivered 24% YoY PAT growth to INR 1,432 crore in Q3 FY25, driven primarily by improved asset quality with Stage III NPA declining sharply to 2.75% from 4.26% YoY. Revenue from operations grew modest 4% YoY to INR 7,057 crore, reflecting the challenging disbursement environment where Bangalore and Hyderabad regulatory/technology issues impacted volumes by INR 700-800 crore. NIM compressed to 2.70% from 3% YoY due to competitive pressures and lower wholesale yields, though PLR hike of 10bps provides some offset. Management flagged strategic pivot toward affordable housing (priced 250-300bps above retail) as margin-accretive growth lever, targeting ~10% of AUM in 2-3 years. With INR 299,144 crore AUM growing 6%, FY25 guidance revised to ~9% IHL growth from initial 10%. Key risks include competitive intensity in prime segment from banks with CASA advantages, potential balance transfer risk if rate cut cycle resumes, and execution challenges in building affordable housing infrastructure while maintaining asset quality. Q4 disbursement guidance of INR 20,000-25,000 crore set.
Colored figures show movement against the previous available record.
Guidance to track
- Despite Q3 disruptions, management expects IHL growth to reach ~9% for FY25, up from current 6.4% total AUM growth, driven by Q4 recovery in Bangalore disbursements and full recovery in Hyderabad.
- Management guided for 10-15% disbursement growth in FY26, underpinned by double-digit AUM growth expectations and new affordable housing vertical contribution.
- CFO indicated margin improvement of 15-20 basis points over a 2-3 year period if affordable housing reaches ~10% of AUM, with partial offset from potential rate cuts.
- All products disbursement guidance for Q4 FY25 set at INR 20,000-25,000 crore, including INR 600 crore undisbursed sanctions in Bangalore awaiting property registration resolution.
Risks flagged
- Analyst Mahrukh Adajania highlighted that LIC HFL's PLR repricing lags banks, creating balance transfer risk when rate cuts begin. Management response relies on liquidity easing and PLR hike, but execution uncertainty remains given competitive banking sector.
- Affordable housing strategy untested at scale. MD acknowledged 'not jumping into it' and building over 2-3 years with separate vertical. Biggest pure-play Aadhar has ~INR 20,000 crore book—LIC HFL's 3x larger base makes incremental affordable growth less impactful.
- MD stated 'four or five cases at advanced stages of resolution' but could not confirm certainty. Abhijit Tibrewal's follow-up on Q4 recovery quantum and FY26 credit cost guidance was addressed with 20bps steady-state provision guidance but specific account-level details withheld.
- MD stated 'I expect Bangalore also, the government is working on it' but simultaneously acknowledged 'still a huge backlog of cases pending for registration.' Q4 guidance predicated on this resolution materializing.
Key quotes
- We are very conscious about getting into it slowly and steadily because we believe this is going to be the segment in the coming years which is really going to grow. The Prime or the salaried class segment, there's going to be tremendous competition.
- Do we really need to grow our books, construction finance books with a rate of 8.5%, 8.6%, 8.7%, which some of the banks are willing to offer? Or do we do a trade-off that grows slightly slower but try to get margin-accretive business?
- The focus is obviously on the large ticket cases. We have identified the large ticket cases as the ones that we will tackle first. We've already demonstrated with one such ARC sale, and various other types of resolutions are also on track. Some of them are at quite advanced stage, and we hope that there will be a positive surprise.
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