In This Article:
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Total Revenue from Operations: ?6,926 crores, up 3% from ?6,753 crores in the previous year.
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Outstanding Loan Portfolio: ?294,588 crores, a growth of 6% from ?277,987 crores.
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Individual Home Loan Portfolio: ?258,879 crores, up 7% from ?234,509 crores.
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Total Disbursements: ?16,476 crores, a 12% increase from ?14,665 crores.
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Net Interest Income: ?1,974 crores, down from ?2,107 crores in the previous year.
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Net Interest Margin: 2.71%, down from 3.04% in the previous year.
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Profit Before Tax: ?1,664.36 crores, a 12% increase from ?1,480.06 crores.
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Profit After Tax: ?1,328.89 crores, up 12% from ?1,188.05 crores.
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Stage Three Exposure at Default: 3.06%, down from 4.33%.
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Total Provisions: ?5,458 crores, with a provision coverage of 49%.
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Cost of Funds: 7.73%, a decline from 7.76%.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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LIC Housing Finance Ltd (BOM:500253) reported a 12% year-on-year growth in profit after tax for Q2 FY25, reaching 1,328.89 crores.
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The company's total disbursements for the quarter increased by 12% year-on-year, with individual home loan disbursements rising by 4%.
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Asset quality improved, with stage three exposure at default reducing to 3.06% from 4.33% the previous year.
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The company launched a new product in the affordable housing segment, targeting higher margins with pricing about 250 basis points above standard home loans.
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LIC Housing Finance Ltd (BOM:500253) observed a sequential growth in its wholesale book for the first time in several quarters, indicating a positive trend reversal.
Negative Points
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Net interest income declined marginally to 1,974 crores from 2,107 crores in the same period the previous year.
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Net interest margins decreased to 2.71% from 3.04% year-on-year, reflecting pressure on profitability.
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The company's yield on assets has decreased by 27 basis points, despite a competitive environment where rates are generally increasing.
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Provision coverage ratio for stage one and two loans has decreased, raising concerns about potential future credit risks.
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The cost of funds remains relatively high, with incremental cost of funds at 7.71%, impacting overall profitability.
Q & A Highlights
Q: Can you explain the decline in yield on assets despite the competitive environment and minimal change in asset mix? A: (Tribhuwan Adhikari, CEO) The focus was on growth, especially in the home loan segment, which led to a temporary decline in yields. However, we have plans to manage this as the rate cut cycle begins, with half of our liabilities on a floating rate and strategies like derivative contracts to align liabilities with assets. (Sudipto Sil, CFO)