Shares in LIC Housing Finance rallied as much as 11.45% to Rs. 308.4 per share on the BSE after the housing financier company on Monday reported a jump of 35.34 per cent in its consolidated net profit to Rs 824 crore for the quarter ended June 2020 (Q1FY21). In the corresponding period of the previous fiscal year, profit stood at Rs. 608.85 crore.
Profit before tax (PBT) also rose 21% year-on-year to Rs. 1017 crore. Revenue from operations during the period under review came in higher by 4% at Rs. 5,011.50 crore versus Rs. 4815.57 crore in the Q1FY20. Net interest income (NII) at the company also increased marginally from Rs. 1181.86 crore in the same period a year ago to Rs. 1220.61 crore for the quarter ended June of FY21. However net interest margin or NIM fell from 2.41% in the same period a year ago to 2.32%
"The rise in profit is mainly attributed to provisioning which was lower in the quarter as compared to the last time (Q1 FY20). However, we have fully provided for whatever is required," the company's managing director and CEO Siddhartha Mohanty said. Of the company's entire loan book, nearly 25% is under moratorium as of June 30, 2020. In the home loan category, 16% of the overall portfolio is under moratorium, which is marginally more than its largest competitor HDFC.
"Over the past two years, LIC Housing Finance's gross non-performing loans (GNPL) ratio has increased 160 basis points (bps) to 2.8 per cent, driven by both retail and corporate delinquencies. At the same time, growth has been sluggish, in the low double digits (barring 1QFY21). In the current pandemic situation, the company would face further headwinds on asset quality, especially in LAP and builder loans. In addition, LICHF's Tier I ratio of 12.3 per cent is lower v/s many peers," the brokerage Motilal Oswal Financial Services (MOFSL) said in a note issued on August 24.
At 11:46 am, LIC Housing Finance shares quoted higher by 8.44% or Rs. 23.35 per share at Rs. 300.05 on the BSE.