BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
LIC Housing Finance Ltd. reported a profit after tax of Rs 9.25 billion (~18% beat), up five times YoY, but down 17% QoQ, led by contained opex and lower than estimated credit costs of Rs 3.1 billion (our estimate: Rs 4.5 billion).
LIC Housing Finance's asset quality exhibited deterioration, with gross stage-III/net stage-III increasing by ~30 basis points QoQ each to 5%/3%. The ~90 bps increase in GS2 was predominantly attributed to reclassification of restructured loans on actual days past due basis.
This was accompanied by an increase in Covid-related provisions to Rs 6.2 billion.
Reported yields declined by ~30 bps QoQ as of June 2022. Net interest margin fell ~10 bps QoQ to ~2.55% in Q1FY23. Core spreads also declined by ~12 bps QoQ to 1.8%, driven by lower yields, even as cost of fund remained stable sequentially.
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