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Informist, Thursday, Jan. 29, 2026

 

By Kabir Sharma

 

MUMBAI – LIC Housing Finance Ltd. is expected to report largely muted performance for the December quarter, with brokerages flagging modest loan growth, pressure on yields due to intense competition, and largely stable net interest margins, even as credit costs remain contained.

 

LIC Housing Finance is expected to post a net interest income of INR 21.18 billion and a net profit of INR 13.86 billion for the December quarter, according to the average of estimates from 10 brokerages. The housing financier had reported a net profit of INR 13.54 billion for the trailing quarter. Shares of the lender have fallen 12% since the company released its earnings for the September quarter. Thursday, its shares ended slightly higher at INR 522.65 on the National Stock Exchange.

 

Most brokerages expect the company's year-on-year loan growth to remain in the mid-single digit owing to competition from public-sector banks. Kotak Securities expects LIC Housing Finance to report "11% YoY growth in disbursements and loan growth of 5%", noting that intense competition continues to weigh on expansion. Mirae Asset Sharekhan also expects the company's performance to be subdued. "Loan growth is estimated to grow by 5.5% y-o-y," it said. Motilal Oswal Financial Services expects loan growth of "(about) 6% YoY with a fairly stable mix".

 

The lender's margins are expected to remain under pressure because of yield compression and the cuts in the Reserve Bank of India's repo rate, though some brokerages believe net interest margins may have bottomed out. Kotak Securities expects the company's net interest margin to "remain flat qoq (quarter on quarter) to 2.6% (down 9 bps yoy) as moderation in cost of funds absorbs yield compressions due to intense competition". Prabhudas Lilladher said margins may have bottomed out and expects them to benefit from a 10 basis-point fall in the cost of funds.

 

After releasing its September quarter results, the LIC Housing Finance management had said further compression in its net interest margin in the rest of the financial year was unlikely and the metric is expected to improve. In a conference call with analysts, the management had also said it expects the company's credit cost to be around 15 bps by the end of 2025-26 (Apr-Mar). The credit cost was 11 bps in the first half of FY26.

 

Brokerages broadly expect the financier's credit costs to remain benign, supported by recoveries and stable asset quality. Kotak Institutional Equities estimates a credit cost of 20 bps in the December quarter, within the range of 14–25 bps reported in the previous three quarters. Mirae Asset Sharekhan pegs credit cost at "18-20 bps, slightly lower on sequential basis", while Motilal Oswal estimates credit cost at 18 bps.

 

The company's operating expenses are expected to inch up sequentially because of the impact of implementation of the new labour codes. Kotak Institutional Equities said the "cost-to-AAUM (average assets under management) ratio will likely inch up 10 bps to 50 bps reflecting impact of labour codes". Brokerages will focus on the management's commentary on margin trajectory, construction finance traction, and recovery progress for cues on earnings going ahead.

 

Following are the Oct-Dec earnings estimates for LIC Housing Finance, in INR billion, from 10 brokerages in descending order of the net profit estimate:

 

Brokerage	Net interest income	Net profit
Prabhudas Lilladher Pvt. Ltd.	22.51	15.10
ICICI Securities Ltd.	21.28	14.57
Elara Securities (India) Pvt. Ltd.	22.62	14.06
Nirmal Bang Equities Pvt Ltd.	21.32	13.90
Nuvama Wealth Management Ltd.	20.70	13.80
JM Financial Institutional Securities Pvt. Ltd.	20.79	13.72
Mirae Asset Sharekhan Ltd.	20.51	13.65
Motilal Oswal Financial Services Ltd.	20.37	13.60
YES Securities (India) Ltd.	21.27	13.30
Kotak Securities Ltd.	20.40	12.92
Average	21.18	13.86

 

End

 

Edited by Rajeev Pai

 

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