LIC Housing Finance Expects Lower NPA Ratio by March 2025
LIC Housing Finance Ltd. is aiming for a gross non-performing asset (NPA) ratio of around 2.6% by the end of the fiscal year 2025. This positive outlook comes despite a slight dip in collections during the December quarter, according to Managing Director and CEO Tribhuwan Adhikari.
Improved Asset Quality Despite Tight Collections
The company’s gross NPA stood at 2.75% in the December 2024 quarter, an improvement from 3.05% in the preceding quarter. Adhikari expressed confidence in the company’s asset quality, stating that they are on track to reach their target NPA ratio by March 2025. He [[emphasized]] that the company is performing well in managing NPAs, showing consistent improvement quarter after quarter. While collections have experienced some [[tightness]], with stage one delinquencies moving to stage two, Adhikari [[assured]] that the overall asset quality remains strong.
Challenges in Hyderabad and Bengaluru Impact Q3 Growth
The company’s growth in the third quarter was partially hampered by issues in Hyderabad and Bengaluru. Despite these setbacks, Adhikari expressed [[optimism]] about a strong fourth quarter, anticipating good disbursements and asset under management (AUM) growth. However, the company expects to slightly miss its double-digit AUM growth target for the current fiscal year, now projecting around 8-8.5% growth. The company aims to achieve 10-12% AUM growth in the next fiscal year.
Financial Performance Updates
LIC Housing Finance’s net interest income saw a 5% year-on-year decline to Rs 2,000 crore in the third quarter, compared to Rs 2,097 crore in the same period last year. However, profit increased by 23% to Rs 1,431.96 crore from Rs 1,162.88 crore a year earlier. The company’s market analysis shows positive business latest updates and indicates a stable financial position. The innovation in the market will surely affect the loan business today. This latest news will surely help their business.
Market Reaction
Shares of LIC Housing Finance Ltd. closed 4.57% lower at Rs 557.95 on the NSE on Monday, while the benchmark Nifty 50 index declined by 0.54%.