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LIC Housing Finance shares jump 11% on strong Q1 earnings

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LIC Housing Finance shares jump 11% on strong Q1 earnings

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The share price of LIC Housing Finance Ltd (LICHFL) rallied over 11 percent in the early trade on Tuesday after the company reported a 34 percent jump in its net profit to Rs 817.48 crore for the quarter ending June.

The share price of LIC Housing Finance Ltd (LICHFL) rallied over 11 percent in the early trade on Tuesday after the company reported a 34 percent jump in its net profit to Rs 817.48 crore for the quarter ending June, helped by lower provisioning. The company's net profit in the year-ago period stood at Rs 610.68 crore.
Net interest income (NII) during Q1FY21 increased 3.27 percent to Rs 1,220.61 crore as against Rs 1,181.86 crore in the same period of the previous year. Net interest margin (NIM) stood at 2.32 percent as compared to 2.41 percent, YoY.
“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,” said Siddhartha Mohanty, managing director and CEO, LIC Housing Finance.
The provisioning during the quarter fell to Rs 56 crore from Rs 253 crore in the year-ago period, he said.
Almost 25 percent of the company's loan book was under moratorium as of June 30, 2020. Individual home loans under moratorium accounted for 16 percent of the home loan portfolio. Nearly 77 percent of its developer loan book was under moratorium as of June 30, 2020.
The mortgage lender’s total disbursements declined to Rs 3,560 crore in Q1FY21 as against Rs 10,261 crore, YoY. Out of this, disbursement in individual home loan segment was Rs 3,034 crore as against Rs 7,871 crore whereas project loans were Rs 159 crore compared with Rs 829 crore.
The total loan portfolio grew 6 percent to Rs 2,09,817 crore as against Rs 1,97,768 crore.
Mohanty said he sees some pick-up in growth in the second quarter.
“With unlocking of activities, our business picked up, especially from the month of June, 2020. Though the economic activities are likely to take some more time to recover, we are witnessing an increasing business trend month after month, and we are confident of a rebound in Q2 itself,” he added.
“Currently, LIC housing trades at 0.75x of TTM Networth which is lower compare to the historical average. Considering lower valuation and not much negative in result, the stock could see positive movement for mid-term,” said Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd.
At 10:05 am, the shares of LIC Housing Finance traded 9.96 percent higher at Rs 304.25 per share on the BSE.
 
(With inputs from PTI)
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