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LIC Housing Finance Q4 Review - Healthy Quarter But Loan Growth Below Our Expectation: Motilal Oswal

LIC Housing Finance Q4 Review - Healthy Quarter But Loan Growth Below Our Expectation: Motilal Oswal

<div class="paragraphs"><p>A residential building. (Photo: Monirul Islam Shakil /Source Unsplash)</p></div>
A residential building. (Photo: Monirul Islam Shakil /Source Unsplash)

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Motilal Oswal Report

LIC Housing Finance Ltd. reported a second consecutive quarter with no unpleasant surprises on margins, operating expenses or asset quality.

Even though the disbursements (down 14% YoY in Q4 FY22) and loan growth (up ~8% YoY) were a touch below our expectations, we highlight the following positives in Q4 FY22:

  1. net interest margin improved ~23 basis point QoQ to ~2.65% aided by ~20 bps improvement in cost of funds, and

  2. reduction of ~110 bps QoQ in the 30 plus days past due that led to lower credit costs of ~30 bps (versus ~60 bps QoQ).

We believe that with its strong liability franchise, LIC Housing Finance will be able to deliver healthy net interest margin of ~2.3% and return on asset/return on equity of 1.1%/11% in FY23E.

Click on the attachment to read the full report:

Motilal Oswal LIC Housing Finance Q4FY22 Result Update.pdf

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