- Total Revenue from Operations: INR6,936 crores, up 8% Q-on-Q from INR6,415 crores.
- Outstanding Loan Portfolio: INR2,86,844 crores, up 4% from INR2,75,047 crores as of March 31, '23.
- Individual Home Loan Portfolio: INR2,44,205 crores, up 7% from INR2,28,730 crores as of March 31, '23.
- Total Disbursements: INR18,232 crores, up 14% from INR16,027 crores in the corresponding quarter last year.
- Individual Housing Loan Disbursements: INR14,300 crores, up 15% from INR12,406 crores in Q4 FY23.
- Project Loans: INR1,501 crores, compared to INR1,554 crores in Q4 last year.
- Net Interest Income (NII): INR2,237 crores, up 12% from INR1,990.30 crores in the corresponding quarter of FY23.
- Net Interest Margins (NIM): 3.15%, up from 2.93% in the previous quarter of FY23.
- Profit Before Tax (PBT): INR1,476.18 crores, up 2% from INR1,444.78 crores.
- Profit After Tax (PAT) for the Quarter: INR1,090.82 crores, compared to INR1,180 crores in the same period previously.
- PAT for FY23-24: INR4,765.41 crores, up 65% from INR2,891.03 crores.
- Dividend Declared: 450%, INR9 per share.
- Stage 3 EAD Exposure: 3.31%, down from 4.37% as of March 31, '23.
- Total Provisions: INR6,270 crores.
- Stage 3 Provision Coverage Ratio: 51%.
- Technical Write-Off for Q4 FY24: INR1,080.57 crores.
- Total Technical Write-Off for FY23-24: INR2,005.62 crores.
- Cost of Funds: Increased by 13 basis points from 7.63% to 7.76% over the last year.
- Incremental Cost of Funds: 7.84% for the full year and 7.90% for the quarter.
- Net Interest Margins for the Year: 3.08%, up from 2.41% last year.
Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LIC Housing Finance Ltd (BOM:500253, Financial) reported a Q-on-Q revenue growth of 8%, with total revenue from operations increasing from INR6,415 crores to INR6,936 crores.
- The individual home loan portfolio grew by 7%, standing at INR2,44,205 crores, which comprises 85% of the total portfolio.
- Total disbursements for the quarter increased by 14%, reaching INR18,232 crores, with individual housing loan disbursements up by 15%.
- Net interest income (NII) grew by 12% to INR2,237 crores, and net interest margins (NIM) improved to 3.15% from 2.93% in the previous quarter.
- The company declared a dividend of 450%, or INR9 per share, reflecting strong profitability and shareholder returns.
Negative Points
- Profit before tax (PBT) showed only a marginal growth of 2%, standing at INR1,476.18 crores.
- Profit after tax (PAT) for the quarter decreased to INR1,090.82 crores from INR1,180 crores in the same period last year.
- The cost of funds increased by 13 basis points during the year, from 7.63% to 7.76%, impacting overall profitability.
- Stage 2 provisions and expected credit loss (ECL) increased significantly, indicating higher risk in certain loan segments.
- The company made a technical write-off of INR1,080.57 crores during Q4, with total technical write-offs for the year amounting to INR2,005.62 crores, reflecting challenges in asset quality.
Q & A Highlights
Q: My first question is on the write-off, was it on builder loans?
A: The write-off is on all loans, both builder and individual home loans (IHL), which are provided for 100%. It is a mix of both, not specifically builder loans.
Q: On the repossessed assets, are they part of Stage 2?
A: No, repossessed assets are Stage 3.
Q: The Stage 2 provision has also gone up. Any reason for the Stage 2 ECL being higher QoQ?
A: The increase in Stage 2 ECL is due to the management overlay.
Q: Any DTA reversal because the tax rate is also higher?
A: The higher tax rate is due to some old Deferred Tax Liability (DTL) for earlier years, amounting to approximately INR127 crores.
Q: The NIM is something we are trying to understand. What has changed in the last year that is allowing us to deliver these margins?
A: This is the fifth consecutive quarter with margins around 3%. We have benefited from the higher interest rate regime and passed on the rate hikes. Additionally, we renegotiated some borrowings, which helped keep interest expenses flat.
Q: Your Stage 3 has declined significantly. Was this due to write-offs or organic resolutions?
A: There have been write-offs, but we also focused on recoveries, which contributed to the decline in Stage 3 accounts.
Q: What is your outlook for disbursement growth next year?
A: We expect double-digit growth in disbursements. The technological changes and organizational expansion have stabilized, and we foresee no hindrance in market demand.
Q: Can you explain the increase in expenses?
A: The increase in Q4 expenses is due to one-off provisions for wage revision arrears (INR32 crores), changes in gratuity calculation (INR22 crores), and additional ECL provisioning (INR100 crores).
Q: What is the outlook for margins next year?
A: We expect to deliver margins in the 2.7% to 2.9% range, closer to the higher end of the band.
Q: What is the current status of your technical write-off pool and management overlay?
A: The technical write-off pool is around INR4,000 crores, and the management overlay is approximately INR1,700 to INR1,800 crores.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
