LIC Housing Finance (LICHF IN) – Q2FY27 Result Update – Growth and margin pressure persists – HOLD
Published on 02 Nov 2026
Q2 disbursements growth was steady (+11.1% YoY), while higher repayments resulted in muted loan book growth of 5% YoY to INR3,219.6bn. AUM is guided to grow at 8-10% in FY27 with diversification into higher-yielding LAP, LRD, self-employed borrowers and project finance. We build a lower AUM growth of 6%/7% in FY27/28E on account of elevated prepayments (~12%) and intense competition from banks constraining growth. We expect NIM to moderate by 8/20bps in FY27/28E to 2.6%/2.5% as rising CoF and competitive pricing to put pressure on margins. Headline asset quality saw an improvement and we build credit cost of -2/12bps for FY27/28E factoring in strong recoveries in H1FY27. However, the shift towards riskier segments is likely to increase asset quality risks. We tweak our FY27/ FY28E estimates downward factoring in weaker growth and NIM compression expected over FY27/28E. We keep our multiple unchanged to 0.6x on Sep’28E P/ABV, resulting in TP of INR520. Retain ‘Hold’.
