LIC Housing Finance net rises 4.6%, disbursement growth slows to 2%

MUMBAI: LIC Housing Finance, the largest home loan company in the country, reported a 4.6% year-on-year increase in net profit to Rs 1,359.9 crore for the quarter ended June 2025. The modest growth followed a 6.6% rise in total income and a 3.9% increase in net interest income, as the drop in lending rates outpaced the decline in cost of funds, leading to narrower margins.Finance costs rose 6.3% to Rs 5,047.3 crore. There was also a drag on profitability from higher provisions and other operating expenses. Impairment on financial instruments jumped 34.8% to Rs 192.9 crore, reflecting a more cautious provisioning approach. Other expenses increased 29.6% to Rs 90 crore, while spending on employee benefits and depreciation grew 5.6% and 10.5%, respectively.Total disbursements stood at Rs 13,116 crore in Q1 FY26, compared with Rs 12,915 crore in the corresponding period of FY25, up 2%. Of this, disbursements in the individual home loan segment were Rs 11,247 crore, compared with Rs 10,932 crore in Q1 FY25, up 3%, whereas project loans were Rs 156 crore compared with Rs 521 crore in Q1 FY25.“We were expecting a surge in demand following the 100 basis points cut in repo rate by the Reserve Bank of India. Unfortunately, that did not happen. The only logical explanation I can give is that people are feeling that we are in the middle of the rate cycle and are waiting for the rates to bottom out,” said Tribhuwan Adhikari, managing director and chief executive officer of LIC Housing Finance. He added that the company aimed to increase the share of its individual home loans but would not go very aggressive on rates.On the income side, fees and commission revenue fell 21.8%, adding further pressure on the bottom line.Asset quality improved compared to the corresponding quarter last year. Gross and net NPAs declined, while the provision coverage ratio increased, indicating a strengthened balance sheet. The board’s decision to shift the registered office for administrative reasons is expected to aid operational efficiency.The gross NPA ratio improved from 3.29% as of June 30, 2024, to 2.62% as of June 30, 2025. The net NPA ratio also improved, from 1.68% to 1.30% over the same period.