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    LIC Housing Finance Q4 FY26 earnings call

    LICHSGFIN
    Financial Services·14 May 2026
    Management Summary

    LIC Housing Finance Limited delivered a robust Q4 FY26, marked by a 10% increase in disbursements and a 9.46% rise in PAT, alongside significant improvements in asset quality. Despite geopolitical uncertainties and competitive pressures leading to NIM compression, the company successfully reduced its cost of funds. Management outlined strategic initiatives, including co-lending, engaging business aggregators, and establishing an affordable housing vertical, to drive double-digit loan book growth and diversify its portfolio, while cautiously navigating market dynamics.

    Highlights

    5

    • Total disbursements for Q4 FY26 were INR 21,019 crores, up 10% YoY, driven by a 25% increase in non-housing individual loans.

    • Net Interest Income (NII) for Q4 FY26 was INR 2,222 crores, showing a sequential growth of 6% Q-on-Q and 3% on Y-o-Y basis.

    • Profit After Tax (PAT) for Q4 FY26 stood at INR 1,497.41 crores, up 9.46% from the previous year.

    • Stage 3 exposure at default improved to 2.16% as on March 31, 2026, from 2.47% a year ago, reflecting a sequential and Y-o-Y improvement.

    • The cumulative cost of funds stood at 7.27% as on March 31, 2026, a decline of 46 basis points on a year-on-year basis.

    Concerns

    4

    • The global economy is navigating heightened geopolitical uncertainty, particularly from the Middle East, leading to volatility in crude oil prices and potential inflationary pressures.

    • Net Interest Margin (NIM) for the full year FY26 compressed to 2.68% from 2.73% in FY25, and spreads ended at 1.94% for FY26, a 12 basis point compression YoY.

    • The potential impact of AI on the IT industry, which is a significant source of business for LIC HFL in major centers, is a concern for future business growth.

    • Competition from banks, which have an inherent advantage of lower cost of funds, makes it challenging to maintain margins in the IHL segment.

    Key financials

    Single quarter

    10 metrics
    1. 01Revenue from Operations₹7,194 Cr-1.2%YoY
    2. 02Outstanding Loan Portfolio₹3.21L Cr+4%YoY
    3. 03Individual Home Loan Portfolio₹2.71L Cr+3.6%YoY
    4. 04Total Disbursements₹21,019 Cr+9.7%YoY
    5. 05Net Interest Income (NII)₹2,222 Cr+2.6%YoY

    Segment breakdown

    Disbursements - Individual Housing Loans
    ₹16,672 Cr Disbursements
    Disbursements - Non-Housing Individual Loans
    ₹3,348 Cr Disbursements
    Disbursements - Project Loans
    ₹847 Cr Disbursements
    Cumulative Yield (31 Mar 2026)
    9.0% IHL10.1% Non-housing individual10.6% Others (corporate/project)9.2% Total
    Gross Stage 3 (GS3) Segment-wise (31 Mar 2026)
    103% Individual loan3.5% Non-housing individual (LAP/LRD)2.1% Total
    Corporate & Projects NPA Exposure (Stage 3)
    ₹2,837 Cr Exposure
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Debt

    Debt disclosed

    Dividend

    ₹10/share (final)

    Guidance & targets

    11
    CategoryTargetPriority
    Credit Growth
    Loan Book Growth
    10% to 12%
    		Medium
    Disbursement Growth
    Disbursement Growth
    15%
    		Medium
    Disbursement Growth
    April Disbursement Growth
    20.87%
    		High
    Profitability
    NIM
    2.6% to 2.7%
    		Medium
    Profitability
    NIM
    2.5% to 2.7%
    		Medium
    Profitability
    ROA
    1.75% to 1.80%
    		Medium
    Profitability
    ROA (Board Target)
    2%
    		Low
    Portfolio Mix
    LAP & LRD Business Proportion
    25%
    		Medium
    Disbursement Target
    Retail Disbursement Budget
    INR 73,000 crores
    		High
    Disbursement Target
    Project Finance Disbursement Budget
    INR 4,500 crores
    		High
    Disbursement Target
    Project Finance Disbursement Expectation
    INR 6,000-7,000 crores
    		Medium

    What to watch in Q1 FY27

    5

    Disbursement Growth

    next quarter
    Current20.87% in April FY27
    Target15% for Q1 FY27

    Why it matters

    To confirm if the strong April disbursement growth translates into the targeted 15% growth for the entire Q1 FY27, indicating momentum for full-year targets.

    Q1, definitely, we are targeting a 15% growth for Q1. Going forward⏳, definitely, if the conditions are what they are, a 10% to 12% growth is what I'm expecting this year, and I'm pretty sure we'll get there this year.

    Risks & concerns

    4
    RiskSeverity

    Geopolitical Uncertainty and Economic Slowdown

    Heightened geopolitical uncertainty from the Middle East conflict is causing volatility in global financial and commodity markets, particularly crude oil prices, which could lead to inflationary pressures and impact domestic growth. — Management acknowledged

    high

    Impact of AI on IT Industry

    Management is worried about the potential impact of AI-driven layoffs in the IT industry, as major business centers for LIC HFL (e.g., Bangalore, Chennai) are heavily reliant on the IT sector. — Management acknowledged

    medium

    Intense Competition and Margin Pressure

    LIC HFL faces significant competition from banks, which have a lower cost of funds, making it difficult to maintain margins, especially in the prime individual home loan segment. — Management acknowledged

    high

    Liquidity Tightening and Interest Rate Hikes

    While liquidity is currently adequate, management notes that if the RBI does not intervene, liquidity could tighten, and there is a possibility of rate hikes if the West Asia crisis prolongs, impacting borrowing costs. — Management acknowledged

    medium

    Q&A highlights

    8

    “Yes. My successor has been identified. In fact, a very unfortunate incident took place. The successor who was identified earlier, suddenly passed away on the 9th of... May 9th of May, Mr. Sanjay Dayal, who was the appointed COO and designated to take over from me. He suffered a sudden heart on the 9th of May and passed away. Now we have another successor in place, Mr. Sandeep Kumar. He has joined us just yesterday, and he will be taking over from me on 31st of August 2026.”

    Provides critical information about leadership transition and an unfortunate event, clarifying future management structure.

    asked by Maruk

    3 min read6 chapters

    Detailed Narrative

    01

    Q4 FY26 Financial Performance Overview

    LIC Housing Finance reported total revenue from operations of INR 7,194 crores in Q4 FY26. Net Interest Income (NII) for the quarter stood at INR 2,222 crores, marking a 6% sequential growth and 3% year-on-year growth. Profit After Tax (PAT) for Q4 FY26 increased by 9.46% YoY to INR 1,497.41 crores. For the full financial year FY26, PAT grew 3% to INR 5,595.15 crores, and the Board declared a dividend of INR 10 per share (500%).

    02

    Loan Book Growth and Disbursements

    The outstanding loan portfolio grew 4% YoY to INR 3,20,707 crores as of March 31, 2026, with the individual home loan portfolio also growing 4% to INR 2,70,893 crores, comprising 84% of the total. Total disbursements for Q4 FY26 were INR 21,019 crores, a 10% increase YoY. Individual housing loan disbursements rose 8% to INR 16,672 crores, while non-housing individual loan disbursements saw a significant 25% jump to INR 3,348 crores. Project loan disbursements, however, declined slightly by 3.19% to INR 847 crores.

    03

    Asset Quality and Provisioning

    Asset quality showed improvement, with Stage 3 exposure at default decreasing to 2.16% as of March 31, 2026, from 2.47% a year prior. Net Non-Performing Assets (NNPA) also reduced to 1.08% from 1.22%. Total provisions stood at INR 4,569 crores, with a Stage 3 provisioning cover of 50.08%. The credit cost for Q4 FY26 was 2 basis points, and for the full year, it was 18 basis points. The company also completed a stressed asset sale of INR 70 crores through an ARC in Q4 FY26.

    04

    Funding and Margins

    The cumulative cost of funds decreased by 46 basis points YoY to 7.27% as of March 31, 2026. Incremental cost of funds for FY26 was 6.94%, down 79 basis points from FY25. Net Interest Margin (NIM) for Q4 FY26 was 2.80%, and for the full year FY26, it was 2.68%, within the guided range of 2.6% to 2.8%. Management noted that 82% of incremental borrowings in FY26 were at floating rates, and the share of floating rate borrowings in the total outstanding portfolio increased to 52%.

    05

    Strategic Initiatives for Growth

    To achieve double-digit growth, LIC HFL is implementing several strategies. These include formulating co-lending and direct assignment policies, engaging business aggregators to source INR 4,000-5,000 crores in the first year, and establishing a new affordable housing vertical with external hires. Additionally, the company is onboarding approximately 200 new marketing personnel by the end of Q1 FY27 to enhance its on-ground presence and business push. A new credit rating model has been introduced to broaden the pool for project finance, with an expectation to achieve INR 6,000-7,000 crores in this segment.

    06

    Economic and Geopolitical Headwinds

    Management highlighted the ongoing geopolitical uncertainty🌐 in the Middle East, leading to volatility in crude oil prices and potential inflationary pressures on the Indian rupee. While India's macroeconomic fundamentals remain resilient, these external factors, along with potential impacts of AI on the IT industry (a key business source for LIC HFL), pose downside risks. The company acknowledges the need for caution and continuous monitoring of these trends, as housing demand is largely sentiment-driven.

    This is an AI-generated summary of a publicly available earnings call transcript.