LIC Housing Finance , a prominent player in the Indian housing finance sector, has set its sights on achieving double-digit loan book growth for the fiscal year, despite facing challenges in the second quarter.

Q2 Performance and Growth Targets

The company reported a 6% growth in Assets Under Management (AUM) during Q2, falling short of its internal target of 8%. This performance has prompted LIC Housing Finance to recalibrate its strategy for the remainder of the fiscal year.

Factors Affecting Growth

MD and CEO Tribhuwan Adhikari attributed the slower growth to two primary factors:

1. Weak performance in the construction finance segment
2. Balance transfer outflows caused by aggressive rate cuts by banks

Interest Rate Dynamics

The company's growth strategy has been impacted by the interest rate environment:

• Banks quickly repriced loans following repo rate reductions
• LIC Housing Finance's prime lending rate is not repo-linked
• The company requires board decisions for rate adjustments

In response to market pressures, LIC Housing Finance implemented a 25 basis points cut in lending rates in April. However, this measure proved insufficient to prevent outflows, which ultimately reduced the expected loan growth by 1.5%.

Future Outlook

Despite the Q2 setback, LIC Housing Finance remains optimistic about its growth prospects:

• The company is targeting double-digit loan book growth
• Expectations are pinned on improvements in retail disbursements in Q3 and Q4

Market Response

The market reacted to the news with caution:

Investor Communication

In line with regulatory requirements, LIC Housing Finance has made efforts to enhance transparency:

• An investor presentation and conference call audio recording for Q2 have been uploaded to the company's website
• The call discussed the unaudited financial results for Q2 and H1

Investors and analysts can access these materials at www.lichousing.com for a more detailed understanding of the company's performance and strategy.

As LIC Housing Finance navigates through these challenges, stakeholders will be keenly watching how the company's strategies unfold in the coming quarters to achieve its ambitious growth targets.

LIC Housing Finance , one of India's leading housing finance companies, has announced ambitious growth projections for its loan book, targeting an expansion to ₹3.5 lakh crore by the fiscal year 2027. This forecast underscores the company's confidence in the housing finance sector and its own growth trajectory.

Loan Book Growth and Asset Quality

The company expects its loan book growth to be primarily driven by a 6% annual increase in individual home loans. This steady growth in the core business segment reflects LIC Housing Finance's focus on the retail housing market.

Alongside this growth, LIC Housing Finance anticipates an improvement in its asset quality. The company projects its gross non-performing assets (GNPA) to decrease to 2.5% by FY27, indicating a strengthening of its loan portfolio quality.

Capital Adequacy and Financial Stability

LIC Housing Finance plans to maintain a robust capital adequacy ratio of 23%, well above regulatory requirements. This strong capital position is expected to provide the company with a solid foundation for sustainable growth and the ability to withstand potential market fluctuations.

Profitability and Margins

Despite projecting growth in its loan book, LIC Housing Finance acknowledges potential pressure on its net interest margin (NIM). The company anticipates its NIM to narrow to 2.6%. However, it expects to maintain stability in profits and margins, supported by its strong capital position.

Current Financial Performance

As of September 30, 2025, LIC Housing Finance reported the following key financial metrics:

These figures demonstrate the company's current strong financial position, providing a solid base for its projected growth.

Market Position and Future Outlook

LIC Housing Finance's projections reflect its optimism about the Indian housing finance sector. The company's focus on individual home loans, coupled with its efforts to improve asset quality, suggests a strategic approach to sustainable growth in a competitive market.

As the company moves towards its FY27 targets, investors and market observers will be keenly watching its ability to balance growth with profitability and asset quality in the evolving economic landscape.