Analyst Concall
LIC Housing Finance sees marginal improvement in NIM in Q4
This story was originally published at 16:22 IST on 2 February 2026
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--LIC Housing: Expect disbursement to grow going forward
--CONTEXT: Comments by LIC Housing's management in post-earnings analyst call
--LIC Housing: Competition with banks in home loan market is intense
--LIC Housing: Will gauge conditions to cut prime lending rate going forward
--LIC Housing: Expect NIM to be in range of 2.70-2.72% in Q4
--LIC Housing: See no compression in NIM in Q4
By Divya Moolayattil and Vaishali Tyagi
MUMBAI – LIC Housing Finance Ltd. expects marginal improvement in its net interest margin for the March quarter, the management told analysts in a post-earnings call Monday. "We have been able to protect our margins.... Going forward I expect NIM to be somewhere around 2.70-2.72%," a top management executive said. The company's net interest margin for the December quarter was 2.69%, down from 2.70% a year ago. The net interest income for the reporting quarter of the housing financier was INR 21.02 billion, up 5% on year.
The housing finance company has been diversifying its loan book to "other than home loans" from individual home loans to improve the net interest margin, the management said. It has increased the share of "other than home loans" in its loan book to around 15% and aims to push it up further to 18% by the end of March. "This diversification gives the benefit of at least 150-200 basis points additional margin as compared to individual home loans," the executive explained. "As far as margin compression is concerned, I don't think there will be any compression."
The company's total disbursements in the December quarter were INR 160.96 billion, up 4% from INR 154.75 billion a year ago. Of this, disbursement in the individual-home-loan segment was INR 130.94 billion, up 7% on year, and in the non-housing individual loan segment was INR 23.04 billion, up 10% on year. The share of individual home loans in the total loan book was around 84% for the December quarter compared to 85.1% a year ago. "We expect disbursement to grow going forward, Q4 should be mininum Rs 20,000 crore (INR 200 billion) in retail," the lender's management said.
The company said it had cut home loan rates by 25 bps in April. This reduction was applied across the entire home loan portfolio, benefiting both new and existing customers. However, it was not a cut in the prime lending rate. The company is open to evaluating a prime-lending-rate reduction if funding costs ease further. "Going forward, let us see if we get a distinct advantage in the lower lending rates. We can (then) think of a PLR cut," the management said.
The company has been facing intense competition from banks in the individual home loan segment, which has affected growth in this segment. As a result, the company does not expect significant growth in the segment in the future. However, it has ventured into the affordable housing segment. "We are very cautious about this segment. But going forward, this is surely going to improve," the management said.
To improve its business and stay competitive, the company is in the process of hiring a consultant within the next 3-4 months, the management said. The consultant will evaluate the company's structure, identify potential changes that could improve performance, align the company with industry best practices, and help it to compete better with its peers.
LIC Housing reported a 3?cline in net profit for the December quarter, mainly because of a sharp rise in impairment charges and overall expenses, even as revenue growth remained modest. The lender, which released its earnings after market hours Friday, reported a standalone net profit of INR 13.84 billion, down from INR 14.32 billion a year ago. Monday, shares of the company closed 2.2% lower at INR 496.35 on the National Stock Exchange. End
Edited by Rajeev Pai
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