LIC Housing Finance Q4 results preview: Net profit likely to fall 28.5% amid weak disbursements

LIC Housing Finance Q4 results preview: LIC Housing Finance — a mortgage lending major that is a subsidiary of insurance behemoth Life Insurance Corporation (LIC) — will report its financial results for the quarter ended March 2023 on Tuesday, May 16. Analysts expect a weak performance from the mortgage lender. 

According to Zee Business research, the non-banking financial company (NBFC) — a housing financier — is likely to report a standalone net profit of Rs 800 crore for the three-month period, which translates to a fall of 28.5 per cent compared with the corresponding quarter a year ago. 

The analysts peg the company's quarterly net interest income — or the interest earned after a business meets its interest-bearing liabilities — at Rs 1,630 crore. That would mean a marginal decline on a year-on-year basis given the NBFC's NII of Rs 1,637.5 crore for the quarter ended March 2022.

The company is likely to see weakness in loan disbursements owing to rising interest rates, according to the research.  

Last month, the Reserve Bank of India (RBI) surprised the market by announcing a pause in the repo rate — or the key interest rate at which it lends money to commercial banks — in contrast to expectations of a hike of 25 basis points. The central bank's decision meant a halt in its cycle of monetary tightening that began in May 2022.

The RBI has already increased the key lending rate by a total 250 basis points in six instalments in the current cycle.     

According to Zee Business research, LIC Housing Finance is likely to witness a contraction in its overall loan portfolio though they estimate its net interest margin to remain steady. Net interest margin (NIM) is a key measure of profitability for a financial institution. 

LIC Housing Finance's margin stood at 2.65 per cent for the quarter ended March 2022. 

LIC Housing Finance shares: Historical performance

LIC Housing Finance shares (LICHSGFIN) shares lost 20.6 per cent of their value in the March quarter, a period in which the headline Nifty 50 index declined 4.1 per cent. 

The NBFC stock finished 2022 with a gain of 12.1 per cent, better than the index's rise of five per cent. 

LIC Housing Finance: Dividend history

LIC Housing Finance has paid one dividend each year in the past two decades.

Here's a brief history of LIC Housing Finance dividends over the recent years: 

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.