LIC Housing's mixed Q4 leaves brokerages on edge; analysts await loan growth outlook

So far this year, shares of LIC Housing Finance surged 18 percent, outpacing Nifty 50 index that rose by a paltry 2 percent during the same period

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26 Aug, 2025 12:21

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Brokerages remain in a wait-and-watch mode on LIC Housing Finance shares after it posted a mixed January-March quarter (Q4FY24) performance. Though the company saw asset quality improvement and margin expansion in Q4, analysts keenly await management's guidance on loan growth in the upcoming quarters.

Motilal Oswal analysts said the company's outlook on demand for mortgages and its guidance on individual home loan growth will be important to track. "Commentary on company's plans to maintain disbursements, NIM guidance, and credit costs for FY25 will also be important to track. We will review estimates after earnings call," they said, sharing a 'buy' call on the counter.

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On the other hand, Morgan Stanley expects LIC Housing Finance stock to be rangebound in the near-term due to low outstanding loan growth. "Though the individual loan disbursements have picked up, but the sustainability of this trend is yet to be seen," they wrote post Q4 results and shared an 'equal-weight' rating with Rs 585 target price.

Nomura analysts differed from the consensus and said that they find LIC Housing Finance valuations reasonable. They maintained a 'buy' rating on the stock with Rs 710 as target price.

"We estimate AUM CAGR of 8 percent for FY24-26F and average credit cost of 51 basis point over FY25-26F. We estimate average RoA/RoE of 1.4 percent/12.5 percent over FY25-26F. In that context, we believe that the current valuation of 0.9x FY26F book remains reasonable," the brokerage firm said.

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LIC Housing Finance's net profit fell 7.5 percent YoY to Rs 1,091 crore in Q4FY24, thanks to higher tax. The company's net interest income (NII) was grew 12 percent YoY to Rs 2,238 crore in Q4FY24 on account of sequential margin improvement.

Overall AUM growth was of 4.3 percent YoY, primarily driven by individual housing loans, which increased by 7 percent YoY in the March-ended quarter. But project loans witnessed negative growth of 32 percent YoY in Q4FY24.

The housing finance company's net interest margin (NIM) for the quarter improved by 22 bps YoY in Q4FY24, while net NPA improved 60 bps QoQ to 1.6 percent.

So far this year, shares of LIC Housing Finance surged 18 percent, outpacing Nifty 50 index that rose by a paltry 2 percent during the same period. Earlier, the stock hit 52-week high of Rs 682 per share on May 2, 2024.

On May 16, LIC Housing Finance shares were flat at Rs 628 per share in intra-day deals.

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