Asset Quality Improvement
Expected: OngoingHIGH confidence
What: Stage-3 EAD: 2.45%
“Stage-3 exposure at default stood at 2.45%, as on 31st December 2025, as against 2.75%, as on 31st December 2024.”
LIC Housing Finance Ltd: Why Is It Outperforming Nifty 500?
ActiveRS +13.6%WeakRe-Entry
In , LIC Housing Finance Ltd (Finance - Housing) is outperforming Nifty 500 with +13.6% relative strength. Fundamentals: Weak.
LIC Housing Finance Ltd Key Facts
- PE Ratio
- 5.8x
- Market Cap
- ₹31,986 Cr
- PAT Growth YoY
- -3%
- Revenue Growth YoY
- +2%
- RS vs Nifty 500
- +13.6%
PB: Cycle BottomStrong Opportunity
What's Happening
💎PB falling while earnings hold — value emerging
🌐FII stake decreased 1.8% this quarter
🏛️DII accumulation — stake up 1.6%
💰Trading 198% below estimated fair value — significant discount
Earnings Acceleration Triggers
1. Asset Quality Improvement
OngoingHIGH
2. Interest Cost Reduction Deleveraging
Q3 FY26MEDIUM
3. Management Or Ownership Change
April 2026MEDIUM
Key Risks
1. Intense rate war with PSU banks offering home loans as low as 7
HIGH2. Large corporate borrowers using legal delays in NCLT/DRT to stall resolutions
MEDIUM3. Need for mindset change among agency workforce and employees regarding new segme
LOWSector-Specific Signals
Net Interest Margin2.69%-1 bps
Stage-3 EAD (Gross NPA)2.45%-30 bps
Cost of Funds7.28%-45 bps
Provision Coverage Ratio (Stage-3)54%+500 bps
Key Numbers
PAT Growth YoY
-3%
Inflection Down
Revenue YoY
+2%
Stable
Price to Book
0.8
Current Price
₹582
Dividend Yield
1.72%
Fundamental Score
32/100
Weak
3Y PAT CAGR
+34%
Market Cap
32.0K Cr
Valuation
Significantly Undervalued12-Week Performance
Weekly presence in the outperformers list. Green = beating Nifty 500 by 10%+ that week.
12 weeks agoThis week
Why Are LIC Housing Finance Ltd's Earnings Accelerating?
Based on Q3 FY26 earnings • Updated Apr 18, 2026
Interest Cost Reduction Deleveraging
Expected: Q3 FY26MEDIUM confidence
What: Cost of Funds: 7.28%
Impact: 7 bps NIM uptick
“The overall cost of funds declined to 7.28%... reflecting a sequential reduction of 14 basis points.”
Management Or Ownership Change
Expected: April 2026MEDIUM confidence
What: Consultant Onboarding: Big Four
“we are in the process of onboarding, special institutions like the Big Four... probably by the end of April or May, we have a concrete plan.”
Cost of Funds reduction of 14 bps QoQ
HIGH confidence
What: Cost of Funds reduction of 14 bps QoQ
“The overall cost of funds declined to 7.28%, as compared to 7.42%, as on 30th of September, reflecting a sequential reduction of 14 basis points.”
What Are the Key Risks for LIC Housing Finance Ltd?
Earnings deceleration risks from management commentary
Intense rate war with PSU banks offering home loans as low as 7
HIGHTrigger: Banks are aggressively chasing secured retail assets, forcing LICHFL to cut rates to protect market share.
Management view: Reduced new home loan rates to 7.15% effective December 22, 2025.
Monitor: regulatory
Large corporate borrowers using legal delays in NCLT/DRT to stall resolutions
MEDIUMTrigger: Big builders use 'every trick of the trade' to stall proceedings, leading to lumpy haircuts when resolved.
Impact: PAT impact: ₹250 Cr haircut loss
Management view: Pursuing resolutions through ARCs and legal stage codes.
Monitor: litigation
Need for mindset change among agency workforce and employees regarding new segme
LOWTrigger: Transitioning from a purely salaried-focused lender to self-employed/affordable segments requires a cultural shift.
Management view: Restructuring compensation to include more variable/performance-based pay.
Monitor: labor
What Is LIC Housing Finance Ltd's Management Saying?
Key quotes from recent conference calls
“beginning of the year, we have given the guidance that NIMs would be in the range of 2.6% to 2.8%. [Previous NIM Guidance guidance]”
“we had in the beginning of the year given you a guidance of about 10% growth, both in disbursements as well as the book. [Previous Loan Book Growth guidance]”
“we are in the process of onboarding, special institutions like the Big Four... to restructure ourselves for better growth in the coming years. [Initiative: Organizational Restructuring]”
“We are first trying to set up a new team, completely separate team for the affordable segment. ... It will take two, three years' time. [Initiative: Affordable Housing Vertical]”
What Did LIC Housing Finance Ltd Report This Quarter?
Headline numbers from the latest earnings call
Revenue
₹2,102 Cr
YoY +5%QoQ +3.1%
Why: Net interest income grew due to a continuous improvement in borrowing costs and a sequential reduction in the cost of funds.
NII growth was supported by a 14 basis point sequential reduction in the overall cost of funds to 7.28%.
EBITDA
₹1,742.51 Cr
YoY -2.8%
Why: Profit before tax was impacted by a one-off haircut of 50% on a large corporate loan resolution involving approximately Rs. 500 crores.
PPOP was not explicitly stated, but PBT declined YoY despite NII growth due to the significant haircut on a corporate resolution.
PAT
₹1,383.95 Cr
YoY -3.4%QoQ +2.2%
Why: PAT was slightly reduced compared to the previous year's December quarter because of a large one-off corporate loan resolution haircut.
The company noted that the previous year's quarter benefited from a different base, while this quarter absorbed a Rs. 250 crore resolution loss.
Other Highlights
• Individual home loan disbursements grew 7% YoY to ₹13,094 Cr.
• Cost of funds declined by 45 basis points on a year-to-date basis to 7.28%.
• Stage-3 exposure at default improved to 2.45% from 2.51% in the previous quarter.
What Sector Metrics Matter for LIC Housing Finance Ltd?
Sub-sector-specific signals from the latest concall — each with management's stated reason for the change
Net Interest Margin
2.69%
YoY -1 bpsQoQ +7 bps
Why: Sequential improvement driven by a 14 bps reduction in cost of funds.
Stage-3 EAD (Gross NPA)
2.45%
YoY -30 bpsQoQ -6 bps
Why: Improvement due to corporate loan resolutions and steady retail asset quality.
Cost of Funds
7.28%
YoY -45 bpsQoQ -14 bps
Why: Benefit from repricing of bank borrowings and lower incremental NCD costs.
Provision Coverage Ratio (Stage-3)
54%
YoY +500 bpsQoQ +100 bps
Why: Management overlay and technical write-offs of fully provided loans.
Individual Home Loan Share
85%
YoY 0%QoQ 0%
Why: Core focus remains on the individual salary segment.
Retail Disbursements
₹13,094 Cr
YoY +7%QoQ -3%
Why: Growth in individual home loans despite intense competition from PSU banks.
Portfolio Yield (Average)
9.40%
Why: Blended yield across individual housing (9.24%) and non-housing (10.22%).
Incremental Yield
8.78%
QoQ 0%
Why: Stable incremental yields despite the rate war in the prime segment.
What Is LIC Housing Finance Ltd's Management Guidance?
Forward-looking targets from management for Q4 FY26
Revenue Growth Target
2.7%
OPM Guidance
2.6–2.8%
Revenue Outlook
2.70% - 2.72%
Margin Outlook
NIM to remain within guided range
Volume
Disbursements expected to reach minimum threshold in Q4
Management Tone: CAUTIOUS
Guidance Changes
LOWERED
Loan Book Growth: 10% → 5%
How Fast Is LIC Housing Finance Ltd Growing?
Revenue, profit and margin growth rates
| Metric | YoY | 3Y CAGR | Trend |
|---|---|---|---|
| Revenue | +2% | +12% | Stable |
| PAT (Net Profit) | -3% | +34% | Inflection Down |
The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Apr 18, 2026.
Other Top Finance - Housing Stocks Beating Nifty 500
Frequently Asked Questions: LIC Housing Finance Ltd
Based on publicly available financial data. This is educational research, not investment advice.
What were LIC Housing Finance Ltd's latest quarterly results?
LIC Housing Finance Ltd's latest quarterly results (Dec 2025) show
- PAT Growth YoY: -2.6% (inflecting downward)
- Revenue Growth YoY: +2.0%
- Net Interest Margin: 25.00%
Is LIC Housing Finance Ltd's profit growing or declining?
LIC Housing Finance Ltd's profit is declining with an inflecting downward trend.
- PAT Growth YoY: -2.6% (latest quarter)
- PAT Growth QoQ: +3.6% (sequential)
- 3-Year PAT CAGR: +33.5%
- Trend: Inflecting downward — consistent growth pattern
What is LIC Housing Finance Ltd's revenue growth trend?
LIC Housing Finance Ltd's revenue growth trend is stable.
- Revenue Growth YoY: +2.0%
- Revenue Growth QoQ: +0.4% (sequential)
- 3-Year Revenue CAGR: +12.1%
What is LIC Housing Finance Ltd's asset quality trend?
LIC Housing Finance Ltd's asset quality trend is insufficient_data.
What is LIC Housing Finance Ltd's 3-year profit and revenue CAGR?
LIC Housing Finance Ltd's long-term compounding rates
- 3-Year Profit CAGR: +33.5%
- 3-Year Revenue CAGR: +12.1%
Is LIC Housing Finance Ltd's growth accelerating or decelerating?
LIC Housing Finance Ltd's earnings growth is inflecting downward with mixed signals on a sequential basis.
- YoY Acceleration: -4.2% bps
- Sequential Acceleration: +4.7% bps
What is LIC Housing Finance Ltd's trailing twelve month (TTM) performance?
LIC Housing Finance Ltd's trailing twelve month (TTM) performance
- TTM PAT: ₹5,000 Cr
- TTM PAT Growth: +6.5% YoY
- TTM Revenue: ₹29,000 Cr
- TTM Revenue Growth: +4.3% YoY
Is LIC Housing Finance Ltd overvalued or undervalued?
LIC Housing Finance Ltd appears significantly undervalued based on our fair value analysis.
- Valuation Signal: Significantly Undervalued
- Current PE: 5.8x
- Price-to-Book: 0.8x
What is LIC Housing Finance Ltd's current PE ratio?
LIC Housing Finance Ltd's current PE ratio is 5.8x.
- Current PE: 5.8x
- Market Cap: 32.0K Cr
- Dividend Yield: 1.72%
How does LIC Housing Finance Ltd's valuation compare to its history?
LIC Housing Finance Ltd's current PE is 5.8x.
- Current PE: 5.8x
- Valuation Assessment: Significantly Undervalued
What is LIC Housing Finance Ltd's price-to-book ratio?
LIC Housing Finance Ltd's price-to-book ratio is 0.8x.
- Price-to-Book (P/B): 0.8x
- Book Value per Share: ₹700
- Current Price: ₹582
Is LIC Housing Finance Ltd a fundamentally strong company?
LIC Housing Finance Ltd is rated Weak with a fundamental score of 32.22/100. This score is calculated from objective financial metrics
- PAT Growth YoY: -2.6% (20% weight)
- PAT Growth QoQ: +3.6% (15% weight)
- Earnings trend: inflection_down (5% weight)
Is LIC Housing Finance Ltd debt free?
LIC Housing Finance Ltd has a debt-to-equity ratio of N/A.
- Total Debt: ₹2.7 Lakh Cr
What is LIC Housing Finance Ltd's return on equity (ROE) and ROCE?
LIC Housing Finance Ltd's return ratios over recent years
- FY2023: ROE 11.0%
- FY2024: ROE 16.0%
- FY2025: ROE 16.0%
Is LIC Housing Finance Ltd's cash flow positive?
LIC Housing Finance Ltd's operating cash flow is negative (FY2025).
- Cash from Operations (CFO): ₹-17,000 Cr
- Free Cash Flow (FCF): ₹-18,000 Cr
- CFO/PAT Ratio: -305% (weak cash conversion)
What is LIC Housing Finance Ltd's dividend yield?
LIC Housing Finance Ltd's current dividend yield is 1.72%.
- Dividend Yield: 1.72%
- Current Price: ₹582
Who holds LIC Housing Finance Ltd shares — promoters, FII, DII?
LIC Housing Finance Ltd's shareholding pattern (Mar 2026)
- Promoters: 45.2%
- FII (Foreign): 21.4%
- DII (Domestic): 20.9%
- Public: 12.5%
Is promoter holding increasing or decreasing in LIC Housing Finance Ltd?
LIC Housing Finance Ltd's promoter holding has remained stable recently.
- Current Promoter Holding: 45.2% (Mar 2026)
- Previous Quarter: 45.2% (Dec 2025)
- Change: 0.00% (stable)
How long has LIC Housing Finance Ltd been outperforming Nifty 500?
LIC Housing Finance Ltd has been outperforming Nifty 500 for 3 consecutive weeks, indicating early-stage outperformance.
Is LIC Housing Finance Ltd a new momentum entry or an established outperformer?
LIC Housing Finance Ltd is a re-entry — it briefly dropped off the outperformance list but has now returned. Re-entries can signal renewed strength.
What are the growth catalysts for LIC Housing Finance Ltd?
LIC Housing Finance Ltd has 4 key growth catalysts identified from recent earnings analysis
- Asset Quality Improvement — Resolution of legacy corporate loans and improved retail collections.
- Interest Cost Reduction Deleveraging — Strategic shift to floating rate bank borrowings (50% of mix) to capture repo rate cuts.
- Management Or Ownership Change — A comprehensive relook at organizational structure and marketing to break the 'stalemate' in growth.
- Cost of Funds reduction of 14 bps QoQ — Shift toward floating rate bank borrowings and benefit from repo rate transmission.
What are the key risks in LIC Housing Finance Ltd?
LIC Housing Finance Ltd has 3 key risks worth monitoring
- [HIGH] Intense rate war with PSU banks offering home loans as low as 7 — Banks are aggressively chasing secured retail assets, forcing LICHFL to cut rates to protect market share.
- [MEDIUM] Large corporate borrowers using legal delays in NCLT/DRT to stall resolutions — Big builders use 'every trick of the trade' to stall proceedings, leading to lumpy haircuts when resolved.
- [LOW] Need for mindset change among agency workforce and employees regarding new segme — Transitioning from a purely salaried-focused lender to self-employed/affordable segments requires a cultural shift.
What did LIC Housing Finance Ltd's management say in the latest earnings call?
In Q3 FY26, LIC Housing Finance Ltd's management highlighted
- "beginning of the year, we have given the guidance that NIMs would be in the range of 2.6% to 2.8%. [Previous NIM Guidance guidance]"
- "we had in the beginning of the year given you a guidance of about 10% growth, both in disbursements as well as the book. [Previous Loan Book Growth g..."
- "we are in the process of onboarding, special institutions like the Big Four... to restructure ourselves for better growth in the coming years. [Initi..."
What is LIC Housing Finance Ltd's management guidance for growth?
LIC Housing Finance Ltd's management has provided the following forward guidance for Q4 FY26
- Revenue growth target: 2.7%
- OPM guidance: 2.6–2.8%
- Management tone: cautious
- Milestone: [LOWERED] Loan Book Growth: 10% → 5%
What sector-specific metrics matter most for LIC Housing Finance Ltd?
LIC Housing Finance Ltd's most important sub-sector-specific KPIs from the latest concall
- Net Interest Margin: 2.69% (YoY -1 bps) (QoQ +7 bps) — Sequential improvement driven by a 14 bps reduction in cost of funds.
- Stage-3 EAD (Gross NPA): 2.45% (YoY -30 bps) (QoQ -6 bps) — Improvement due to corporate loan resolutions and steady retail asset quality.
- Cost of Funds: 7.28% (YoY -45 bps) (QoQ -14 bps) — Benefit from repricing of bank borrowings and lower incremental NCD costs.
- Provision Coverage Ratio (Stage-3): 54% (YoY +500 bps) (QoQ +100 bps) — Management overlay and technical write-offs of fully provided loans.
- Individual Home Loan Share: 85% (YoY 0%) (QoQ 0%) — Core focus remains on the individual salary segment.
- Retail Disbursements: ₹13,094 Cr (YoY +7%) (QoQ -3%) — Growth in individual home loans despite intense competition from PSU banks.
Is LIC Housing Finance Ltd worth studying for long term investment?
Based on quantitative research signals, here is why LIC Housing Finance Ltd may be worth studying
- Valuation: appears significantly undervalued
- Strong returns — ROE 16.0%
What is the investment thesis for LIC Housing Finance Ltd?
LIC Housing Finance Ltd investment thesis summary:
Research Signals (Bull Case)
- Appears significantly undervalued
- Growth catalyst: Asset Quality Improvement
Risk Factors (Bear Case)
- Key risk: Intense rate war with PSU banks offering home loans as low as 7
What is the future outlook for LIC Housing Finance Ltd?
LIC Housing Finance Ltd's forward outlook based on current data signals
- Earnings Trend: inflecting downward
- Revenue Trend: stable
- Valuation: Significantly Undervalued
- Key Catalyst: Asset Quality Improvement
- Key Risk: Intense rate war with PSU banks offering home loans as low as 7
The above FAQs are generated from publicly available earnings data and conference call transcripts. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.