LICHSGFIN Q4 FY25 earnings call.
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Revenue
₹7,283 Cr
verified against source
Revenue YoY
5%
reported change
EBITDA
₹1,769.58 Cr
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 a strong Q4 FY25 with PAT growth of 25% YoY to INR 1,367.96 crore, driven by robust recoveries and improving asset quality. GNPA improved sharply to 2.47% from 3.61% YoY, with total provisions at INR 4,899 crore providing adequate buffer. The company raised PLR by 10bps in January 2025 amid tight liquidity, then cut 25bps from April 28, with full transmission to borrowers by July 1. NIM compressed to 2.86% from 3.15% YoY as competitive intensity from PSU banks (who cut rates 50-60bps) pressures spreads. Management targets FY26 disbursement growth of 10-12% and loan book growth above 10%, with project finance targeted at INR 10,000 crore vs INR 4,200 crore achieved in FY25. NIM guidance maintained at 2.6-2.8% despite competitive pressures. Recovery momentum continues with net recovery of INR 1,800 crore in FY25 and target of INR 1,500+ crore for FY26. Risk: margin compression from aggressive PSU bank pricing combined with slower-than-expected project loan resolution amid ongoing litigation.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects NIM to be range-bound between 2.6% (worst case) and 2.8% (best case) for FY26, compared to 2.73% in FY25, as competitive intensity from PSU banks pressures spreads.
- Management targets disbursement growth of at least 10-12% for FY26, aiming for double-digit growth quarter-over-quarter with April described as satisfactory and May picking up.
- Project finance disbursements targeted at INR 10,000 crore for FY26 vs INR 4,200 crore in FY25, growing from 3% of portfolio selectively by focusing on reputed builders with sustainable margins.
- Management targets reducing GNPA from 2.47% to below 2.2%, with credit cost expected in the 9-15bps range, similar to FY25's 9bps.
Risks flagged
- PSU banks have cut new home loan pricing by 50-60bps in the last three months, offering near-8% rates to existing customers switching institutions. This is increasing portfolio retention pressure and basis point stress on the existing loan book, requiring selective rate matching.
- No big project loans were resolved in Q4 despite management expectations, as most remaining sticky loans are in litigation (NCLT, DRT, SAT). One INR 450 crore loan recently approved for restructuring won't exit NPA until May 2026. ARC basket sale failed to attract expression of interest.
- Management acknowledges NIM will face pressure as the full 50bps repo rate cut transmits through borrowing costs and is passed to borrowers. Spread maintenance at 2.06% requires balancing competitive pricing with growth targets in a single-product company competing against banks with CASA advantages.
- While incremental cost of funds has declined to 7.3% from 7.66%, the overall borrowing book of ~INR 270 lakh crore includes older high-cost term loans and NCDs that need to mature/retire. Full transmission to book cost will lag, creating a timing mismatch in margin optimization.
Key quotes
- I feel we should be able to handle that. We have ended the year with a NIM of 2.72. I think we should be in that region. So my guidance for the year.
- We have to diversify into that segment. At the same time, aim for lower borrowing costs so that my spreads, which are at 2.06%, remain at that level. I would say spreads would, we would keep the spreads in the region of about 2%.
- This is going to be a tightrope walk for us. I realize that. As a company, we have to be on our toes, keep eyes here, everything open, noses to the ground, feet on the street.
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