LIC Housing Finance – A Good Q4FY13 Performance

LIC Housing Finance posted a strong financial performance for the quarter ended March 2013. While the total income for the quarter stood at Rs 2075 crore as against Rs 1689 crore in March 2012, the net interest income stood at Rs 461 crore as against Rs 371 crore in March 2012. On the bottomline front, the performance has been very strong and the company posted a bottomline of Rs 316.16 crore against Rs 253.60 crore respectively (up by 25% on a YoY basis).

The noticeable factor here is that there has been a strong traction in the sanctioned loans as well as loans disbursed. While loans sanctioned in March 2013 quarter increased to Rs 7842 crore from Rs 5638 crore in March 2012 (up by 39%), the disbursement increased by 19% to Rs 7536 crore in the similar period.

As regards the yearly performance, the total income for FY13 stood at Rs 7659 crore as against Rs 6215 crore in FY12 (up by 23%). The bottomline for FY13 stood at Rs 1023.21 crore as against Rs 914.20 crore in FY12. 

Despite such a strong growth in advances, the company managed to sustain its better asset quality. While the gross NPAs stood at 0.61% (0.42% in FY12), the net NPAs stood at 0.36% marginally up from 0.14% earlier. The net interest margins for the year stood at 2.18% as against 2.44% for the previous year. The company has announced a dividend of Rs 3.80 per share. 

Considering the slowdown in the realty segment, the housing finance companies have been underperforming. However, we feel that the strong presence of LIC Housing Finance in Tier II and Tier III cities has helped the company put in better growth and performance. We recommend investors to hold the counter at the current levels.