LIC Housing Finance surges 11% as net profit in June quarter

Shares of LIC Housing Finance rallied nearly 11 per cent on the BSE on Tuesday, a day after the company reported a 35.34 per cent rise in its consolidated net profit at Rs Rs 824 crore for the quarter ended June 2020 (Q1FY21).

The company had posted a profit of Rs 608.85 crore in the corresponding quarter of the previous fiscal.

Its profit before tax (PBT) rose 21 per cent year-on-year (YoY) to Rs 1,017.67 crore.

The company’s total revenue from operations stood at Rs 5,011.50 crore, up 4 per cent against Rs 4,815.57 crore in the year-ago period.

The company’s net interest income (NII) rose marginally to Rs 1,220.61 crore in Q1FY21 from Rs 1,181.86 crore in Q1FY20. The net interest margin (NIM) declined to 2.32 per cent from 2.41 per cent for the same period in the previous year.

The overall moratorium rate remained stable at 25 per cent. In retail home loans, the moratorium rate was 16 per cent, marginally higher than its largest peer, HDFC, note analysts at Motilal Oswal Financial Services (MOFSL).

“Over the past two years, LIC Housing Finance’s gross non-performing loans (GNPL) ratio has increased 160 basis points (bps) to 2.8 per cent, driven by both retail and corporate delinquencies. At the same time, growth has been sluggish, in the low double digits (barring 1QFY21). In the current pandemic situation, the company would face further headwinds on asset quality, especially in LAP and builder loans. Also, LICHF’s Tier I ratio of 12.3 per cent is lower v/s many peers,” the brokerage said in a note issued on August 24.

At 09:46 AM, the stock was trading 10.6 per cent higher at Rs 306.05 on the BSE as compared to 0.36 per cent gain in the S&P BSE Sensex.