LIC Housing: Interest margins improve, but asset quality is key

The sharp increase in gross NPAs reflect stress in its loan against property business.

LIC Housing Finance, India’s second largest housing financier, reported its March quarter (Q4) results over the weekend. The numbers met estimates, but LIC Housing stock didn’t have a brisk day at the bourses on Monday. Two key reasons explain the muted show.

Firstly, gross non-performing assets (NPA) ratio saw a swift 75 basis points (bps) increase year-on-year in Q4. Gross NPA in its core individuals lending business nearly doubled from 0.42 per cent last year to 1.14 per cent in Q4. For investors, this is a setback as LIC Housing’s individual loans segment sources 85 per cent of loan from