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LIC Housing Finance Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤30th Jan 26

Summary : LIC Housing Finance reports strong Q3 FY26 consolidated financial results with improved asset quality and liquidity, but faces auditor concerns regarding NCD security cover computation.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Consolidated Total Expenses: Rs. 5,452.73 Cr (Q3 FY26), Rs. 16,475.36 Cr (9M FY26).
  2. Standalone Total Expenses: Rs. 5,444.48 Cr (Q3 FY26), Rs. 16,443.49 Cr (9M FY26).
  3. Consolidated Finance costs: Rs. 4,940.87 Cr (Q3 FY26), Rs. 14,980.96 Cr (9M FY26).
  4. Consolidated Impairment on financial instruments: Rs. 153.57 Cr (Q3 FY26), Rs. 514.60 Cr (9M FY26).
  5. Receivables under financing activities consist of large number of small ticket loans, held to maturity.
  6. Consolidated Total Revenue from operations: Rs. 7,208.92 Cr (Q3 FY26), Rs. 21,638.33 Cr (9M FY26).
  7. Standalone Total Revenue from operations: Rs. 7,186.98 Cr (Q3 FY26), Rs. 21,583.43 Cr (9M FY26).
  8. Loans segment revenue: Rs. 7,186.99 Cr (Q3 FY26), Rs. 21,589.87 Cr (9M FY26).
  9. Other segments revenue: Rs. 38.91 Cr (Q3 FY26), Rs. 97.98 Cr (9M FY26).
  10. Standalone Net worth: Rs. 38,200.57 Cr (as at 31-12-2025) vs Rs. 32,808.94 Cr (as at 31-12-2024).
  11. Consolidated Reserves excluding Revaluation Reserves: Rs. 36,241.71 Cr (as at March 31, 2025).
  12. Consolidated Segment Assets (Loans): Rs. 3,19,964.43 Cr (Q3 FY26).
  13. Group's share of net profit after tax from associates: Rs. 0.87 Cr (Q3 FY26), Rs. 1.17 Cr (9M FY26), deemed not material.
  14. Both standalone and consolidated unaudited financial results are presented and reviewed.

Corporate Overview

  1. No material operations outside India; geographic segments disclosure not given.
  2. Monitoring finalization of Central/State Rules and clarifications for new Labour Codes.
  3. Addressing auditor's finding regarding NCD security cover computation and sufficiency.
  4. Shareholding in LIC Mutual Fund Asset Management Ltd reduced from 33.52% to 30.33%.
  5. Primarily providing loans for purchase, construction, repairs, and renovation of residential houses.
  6. Other segments include financial services, construction, asset management, and trusteeship.
  7. Positive and compliant, certifying true and fair view of financial results.
  8. No single customer represents 10% or more of total revenue.
  9. Loans segment (major contributor to revenue and profit).
  10. Other segments (Financial Services, Construction, Asset Management, Trusteeship).
  11. 8 projects under implementation with Rs. 91.23 crore outstanding, with resolution plans implemented.

Risk Factors

  1. Auditors question NCD security cover.
  2. Security cover below required 100%.
  3. New Labour Codes impact uncertain.
  4. Reliance on other auditors' reports.

Key Drivers

  1. Robust interest income growth observed.
  2. Asset quality ratios significantly improved.
  3. Liquidity coverage ratio strengthened.
  4. Experienced independent director re-appointed.

Auditor’s Report

  1. Limited Review Conclusion (for both consolidated and standalone financial results).
  2. Qualified opinion/adverse finding on security cover certificate (not in agreement with financials, not 100% or more than required).
  3. Review of unaudited consolidated and standalone financial results.
  4. Verification of security cover for listed non-convertible debt securities (NCDs).
  5. Reliance on other auditors for subsidiaries and associates.
  6. Security cover computation for debenture holders not in agreement with financial results and not 100% or more than required.

Board Commentary

  1. Re-appointment of Smt. Jagennath Jayanthi as an Independent Director for a second term of five consecutive years from February 5, 2026, subject to shareholder approval.
  2. Auditors' report highlights issues with security cover computation and sufficiency for debenture holders.
  3. Government of India notified four Labour Codes on November 21, 2025; company assessed no material impact.
  4. 8 projects under implementation with Rs. 91.23 crore outstanding, for which resolution plans have been implemented.

Corporate Governance

  1. Smt. Jagennath Jayanthi re-appointed as Independent Director, satisfying Fit & Proper Criteria and not debarred.
  2. Independent Director serves on Audit, Nomination & Remuneration, Stakeholders' Relationship, Corporate Social Responsibility, and Special Committee for Monitoring Frauds.
  3. Auditors' certificate on security cover for NCDs indicates non-agreement with financial results and insufficient cover.

Management Discussion & Analysis

Macroeconomic Outlook

  1. Government of India notified four Labour Codes on November 21, 2025, consolidating 29 existing labour laws.

Operational Focus Areas

  1. Monitoring finalization of Central/State Rules for Labour Codes.
  2. Ensuring compliance with SEBI Listing Regulations and Debenture Trust Deeds for NCDs.

Performance Drivers

  1. Improved Provision Coverage Ratio (PCR) from 47.56% to 54.59%.
  2. Reduced Gross Non Performing Assets (GNPA) from 2.74% to 2.45%.
  3. Reduced Net Non Performing Assets (NNPA) from 1.46% to 1.13%.
  4. Increased Liquidity Coverage Ratio (LCR) from 187.66% to 190.11%.
  5. Improved Debt-to-Equity ratio from 8.19 to 7.30.

Risk Control Measures

  1. Company assessed no material impact from new Labour Codes based on available information and ICAI guidance.
  2. Maintains security cover for NCDs at 1.19 times (though auditors dispute agreement/sufficiency).
  3. Resolution plans implemented for projects under implementation.

Critical Risks

  1. Auditors' finding that security cover computation for debenture holders is not in agreement with financial results.
  2. Auditors' finding that security cover for debenture holders is not 100% or more than required.