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LIC Housing Finance Q1 Review - Weak Asset Quality Outweighs Multiple Other Positives: Nirmal Bang

LIC Housing Finance Q1 Review - Weak Asset Quality Outweighs Multiple Other Positives: Nirmal Bang

<div class="paragraphs"><p>Plants grow from window boxes on the balconies of residential apartments. (Photographer: Chris J. Ratcliffe/Bloomberg)</p></div>
Plants grow from window boxes on the balconies of residential apartments. (Photographer: Chris J. Ratcliffe/Bloomberg)

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Nirmal Bang Report

LIC Housing Finance Ltd. reported weak results for Q1 FY22, with its profit after tax dropping by 81% YoY on account of net interest margin compression, one-off employee expenses (Rs 1.25 billion) and increase in provisioning.

High stress levels continue to keep us uncomfortable.

Along with sticky project level non performing assets, we have also seen a sharp deterioration in the retail segment’s asset quality.

The management expects collections to improve going forward. Our discomfort around provisioning levels remains unchanged.

Overall loan book growth was 10.8% YoY on the back of disbursements rising by 143% YoY.

In view of the strong demand trends for housing finance, LIC Housing Finance’s low cost of funds positions the company competitively.

Click on the attachment to read the full report:

Nirmal Bang LIC Housing Finance-Q1FY22 Result Update .pdf

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