Shares of LIC Housing Finance traded lower on Wednesday, October 30, falling 2.92% to Rs 576.10 in early trade after the housing finance major posted a muted earnings performance for the September quarter. The stock opened weak and continued to drift, reacting to slower profit growth despite improvements in asset quality.
The company reported a 2% year-on-year rise in standalone net profit to Rs 1,354 crore for Q2 FY26, compared to Rs 1,329 crore in the corresponding quarter last year. Consolidated net profit came in slightly lower at Rs 1,349 crore, up 1.5% YoY.
Total income increased to Rs 7,170 crore versus Rs 6,932 crore a year ago, supported by improved interest income at Rs 7,034 crore, up from Rs 6,853 crore in Q2 FY25.
Asset quality improves
LIC Housing Finance continued to strengthen its loan book quality, with gross NPAs declining to 2.51% from 3.05% a year earlier. Net NPAs also improved to 1.19%, down from 1.57% in Q2 FY25, signalling better recovery traction and asset cycle stability in the retail housing segment.
Liquidity and business outlook
The company’s liquidity coverage ratio slipped to 185.86% from 197.18% in Q2 FY25 but remained comfortably above regulatory requirements. LIC Housing Finance stated that loan disbursement trends remain healthy, supported by stable demand for home loans.
Market reaction
Despite the gradual improvement in asset quality, the street reacted to the slower profit growth trend, leading to selling pressure in the stock. LIC Housing Finance touched a low of Rs 575.50 intraday versus the previous close of Rs 593.45.
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