Margin compression risk from rate cuts
Management guided NIM to 2.7%-2.9% for FY25 (vs 3.08% in FY24), acknowledging that RBI rate cuts would pressure margins. Rate cuts would be passed to borrowers with roughly one-quarter lag.
LICHSGFIN / Q4-FY24 / risks
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LIC Housing Finance · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Elevated cost of funds trajectory
Cost of funds increased 13bps YoY to 7.76% and 6bps sequentially in Q4. Incremental cost of funds stood at 7.90% for Q4 vs 7.84% full-year average, indicating continued funding cost pressure.
Large technical write-off pool recovery uncertainty
Technical write-off pool of ~INR 4,000 crore (predominantly builder book in litigation/IBC) has uncertain recoverability. Management declined to provide recovery estimate, noting litigation is a slow process.
One-time Q4 provisions distort quarterly earnings
Q4 PAT was impacted by ~INR 381 crore in one-off provisions (wage revision, gratuity change, DTL, ECL buffer). Excluding these, quarterly earnings would have been materially higher.