LIC Housing Finance Q1 Results: Net profit drops 2% to ₹1,300 crore, NII down 10% YoY

LIC Housing Finance Q1 Results: LIC Housing Finance announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Friday, August 2, reporting a drop of around two per cent in standalone net profit to ₹1,300.2 crore, compared to ₹1,323.7 crore in the corresponding period last year.

The leading non-banking financial company (NBFC)'s net interest income (NII)—the difference between interest earned on loans and paid on deposit—dropped 10 per cent to ₹1,989 crore, compared to ₹2,209.4 crore in the year-ago period. 

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LIC Housing Finance Q1 Results: Key Metrics

The NBFC's net profit in the June quarter declined as higher borrowing costs offset gains from steady home loan demand. The net interest margin, a key gauge for profitability, shrunk to 2.76 per cent from 3.21 per cent a year earlier.

With regard to asset quality, the LIC-promoted housing finance company witnessed improvement in gross non-performing assets (NPAs) ratio to 3.21 per cent from 3.31 per cent in the preceding January-March quarter of FY24. The net NPA ratio rose to 1.68 per cent from 1.63 per cent compared to the preceding quarter.

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The company's interest income rose to ₹6,739 crore from ₹6,703 crore in the first quarter of the previous fiscal. During the quarter, total expenses grew to ₹5,155 crore from ₹5,098 crore a year ago. Home finance companies have seen strong demand for home loans in hopes of a rate cut later in the year, but higher borrowing costs have impacted LIC Housing's bottom line.

The company expects a gradual downtrend in interest rates to accelerate demand in the sector further this year. "Following the technology upgrades and organizational restructuring, we are now fully equipped to aim for faster growth, especially in (the) individual housing loan segment," the company said in a statement. Ahead of the announcement of Q1FY25 results, shares of LIC Housing Finance settled 1.16 per cent lower at ₹74.45 apiece on the BSE.