LIC Housing Finance Q2 PAT seen up 150% to Rs 245 cr

LIC Housing Finance's profit after tax is expected grow by 150 percent year-on-year to Rs 245 crore in the quarter ended September 2012. The PAT was higher because in the year ago period the company's provision against bad loan was Rs 205 crore.

Net interest income is seen going up by 11 percent to Rs 372 crore from Rs 334 crore during the same period.

In the April-June quarter, the company disappointed the street. Net interest income fell by 3 percent YoY to Rs 350 crore and profit after tax dropped by 11 percent to Rs 228 crore as against forecast of 12 percent growth and 10 percent, respectively.

Hence, for the July-September quarter, analysts are focusing on whether there will be any recovery - especially in net interest margin that fell 2.18 percent in Q1 as against 2.44 percent in March quarter due to higher cost of funds (to 9.6 percent in Q1 versus 9.2 percent QoQ and 7.7 percent YoY).

LIC Housing Finance is expected to raise Rs 1156 crore via QIP by December.

Analysts feel individuals’ loan segment is expected to pull up total loan book growth of the company. Hence, loan book is expected to grow 23 percent YoY but the YoY decline in builder portfolio to continue.

Margins could expand 10 basis points QoQ - led by lower cost of funds + repricing of teaser loan rates. Analysts expect repricing of Rs 2500 crore in Q2FY13.

Asset quality is expected to be healthy as provision against bad loans is likely to be Rs 20 crore as against Rs 200 crore in previous quarter.