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Informist, Tuesday, May 12, 2026

By Kabir Sharma

MUMBAI – LIC Housing Finance Ltd. is expected to report subdued earnings for the March quarter, with analysts forecasting moderate loan growth, pressure on margins, and slightly elevated credit costs amid intense competition in the mortgage market.

The average of the estimates of seven brokerages pegs the net profit for the March quarter at INR 14.01 billion, up 2.4% on year, while net interest income is seen at INR 21.95 billion, largely unchanged from a year ago. Among brokerages, Prabhudas Lilladher has the highest net profit estimate of INR 15.23 billion, as well as the highest net interest income estimate of INR 23.41 billion. On the other hand, JM Financial Institutional Securities has the lowest net profit estimate of INR 13.28 billion, and Motilal Oswal Financial Services has the lowest estimate for net interest income at INR 20.95 billion.

The company will detail its earnings for the March quarter on Wednesday.

Motilal Oswal Financial Services expects loan growth of around 4% year-on-year with a fairly stable portfolio mix. The brokerage also expects yields and margins to decline sequentially. Kotak Securities expects disbursements to rise 16% on year and loan growth of 7%, but believes spreads are likely to remain flat sequentially at 1.75%, down 20 basis points from a year earlier, as higher yields would be offset by rising borrowing costs.

The company's total disbursements in the December quarter were INR 160.96 billion, up 4% from INR 154.75 billion a year ago.

Analysts have repeatedly pointed out that the company has been prioritising profitability and margin protection over aggressive growth. In its December quarter results, LIC Housing Finance reported only 4% growth in disbursements and a 5% rise in net interest income, reflecting the slowdown in business momentum. Individual home loan portfolio growth also remained muted at 4% year-on-year.  

The management, however, has maintained that retail demand should improve gradually and has guided for double-digit loan growth over the medium term. Managing Director and Chief Executive Officer Tribhuwan Adhikari had earlier said the company expects a pickup in retail disbursements in the second half of the year.  

Margins are expected to remain under pressure in the March quarter despite some easing in funding costs. Analysts expect the company's net interest margins to stay within the guided range of 2.6-2.8%, with competition and loan repricing limiting expansion. The company's net interest margin for the December quarter was 2.69%, down from 2.70% a year ago.

In a report after the December-quarter earnings, Prabhudas Lilladher Capital had said loan book growth might remain in the 6-7% range over FY26 and FY27, while margins could moderate further because of lower incremental yields and continued balance transfer pressure.  

Asset quality is expected to remain stable. Motilal Oswal Financial Services has estimated annualised credit costs of around 17 basis points for the quarter, while Kotak Securities has pencilled in credit costs of 23 basis points, compared with a 14-25 basis point range over the previous four quarters. The management had earlier indicated that credit costs would likely remain around 15 basis points and that asset quality trends were improving steadily.  

Investors will closely track the management's commentary on loan demand, margin trajectory, balance transfer trends and growth guidance for FY27, especially as the broader housing finance industry continues to navigate a high competition from banks, brokerages said. 

Of the nine brokerage reports available on the company with Informist, four have a 'buy' rating on the stock with an average target price of INR 621 per share. This is nearly 10% higher than the current market price. Five brokerages have a 'hold' recommendation with an average target price of INR 566 per share.

Following are the March quarter earnings estimates for LIC Housing Finance from seven brokerages in descending order of the estimate of net profit in INR billion:

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Edited by Avishek Dutta

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