LIC Housing Finance Ltd (Q2FY26) – The 36-Year-Old Banker That Still Doesn’t Miss an EMI!
1. At a Glance
LIC Housing Finance Ltd (LICHFL) — the grand old wizard of India’s housing loan universe — has dropped its Q2FY26 numbers, and the story reads like a cautious banker finally loosening his tie. The company clocked revenue of ₹7,179 crore, up 3.5% YoY, and PAT of ₹1,349 crore, up 1.6% YoY. Not exactly the kind of fireworks that make Dalal Street sing, but hey — when your loan book is ₹3.11 lakh crore, stability is the story.
At a current price of ₹593, LIC Housing sits on a market cap of ₹32,643 crore, sporting a P/E of just 5.9x and a P/B of 0.85x — basically, you’re buying the book and getting the brand for free. ROE is 16%, ROA 1.8%, and NIM 3%, all while managing a GNPA of 2.51%. That’s not bad for a company whose borrowers include half of India’s middle class and whose promoter — LIC — probably knows every family’s insurance premium.
Q2 also saw disbursements of ₹16,313 crore, led by steady individual home loan demand. The housing loan war is heating up with HDFC Ltd gone to the bank side, Bajaj Housing flexing its muscles, and PNB Housing playing catch-up. But LICHFL continues to be the “old reliable” — the HDFC of the 90s, now wearing bifocals but still signing fresh loan papers faster than your credit score can update.
2. Introduction – The Banker That Outlived Half Its Borrowers
Incorporated in 1989, LIC Housing Finance has literally built India’s homeownership dream — one EMI at a time. Before “Fintech” became a buzzword and “NHB” started sounding like a start-up incubator, LICHFL was quietly writing cheques for homes when most Indians were still filling paper forms in triplicate.
Backed by Life Insurance Corporation of India, which owns 45.24%, the company enjoys a halo of trust that no app-based lender can fake. Its total loan book now stands at a colossal ₹3.12 lakh crore, making it India’s largest standalone housing finance company (excluding the post-merger HDFC Bank behemoth).
Over the last five years, LICHFL has not only grown its book by nearly ₹77,000 crore but also cleaned up its act: GNPA dropped to 2.51% and capital adequacy improved to 19.7%. The focus has shifted from risky developer loans to bread-and-butter home loans — safer, steadier, and less likely to give auditors a heart attack.
Still, in an era where peers like Bajaj Housing are bragging about 40x valuations, LIC Housing looks like the seasoned banker who quietly counts profits instead of chasing valuation hype.
3. Business Model – The Grand Old Loan Factory
Think of LIC Housing as the “old-school mutual fund SIP” of the lending world — boring but brutally consistent. Its business model revolves around home loans (85%), loan against property (10%), and project finance (5%). Over time, the company has shifted from risky developer funding to low-risk salaried borrowers — a smart move that’s paying off in lower NPAs and stable margins.
Revenue Streams:
Interest Income: Over 95% of total revenue; predictable and boring (the best kind for financiers).
Other Income: Processing fees, lease rental discounting (LRD), and insurance cross-sell.
Borrower Profile:
Salaried: 88%
Self-employed: 12%
Average Ticket Size: ₹12 lakh — the sweet spot for India’s emerging middle class.
Distribution: 310 marketing offices, 9 regional offices, and a Dubai representative desk (because even NRIs need EMIs). Over 35 lakh customers are serviced by this empire, often sourced via LIC’s legendary agent network.
In 2020, LIC Housing finally decided to embrace the future with Project RED (Reimagining Excellence through Digital Transformation) — basically, their way of saying “let’s teach Excel macros to 50-year-old managers.” Today, 35%+ of all disbursements happen digitally through their HOMY App.
Question: when a company that used to run on ledger books now approves ₹2,150 crore loans online — is that digital progress or just catching up to millennials?
4. Financials Overview
Metric
Latest Qtr (Sep’25)
YoY Qtr (Sep’24)
Prev Qtr (Jun’25)
YoY %
QoQ %
Revenue
₹7,179 Cr
₹6,938 Cr
₹7,250 Cr
3.5%
-1.0%
EBITDA / Financing Profit
₹1,735 Cr
₹1,687 Cr
₹1,729 Cr
2.8%
0.3%
PAT
₹1,349 Cr
₹1,328 Cr
₹1,364 Cr
1.6%
-1.1%
EPS (₹)
24.5
24.1
24.8
1.7%
-1.2%
The quarterly results look stable — no fireworks, no landmines. Annualized EPS = ₹98, which means a P/E of 6x, or as analysts say, “Why is this so cheap?”
5. Valuation Discussion – Fair Value Range
Method 1: P/E Valuation Industry peers (Bajaj, Aavas, Aptus) trade between 15–30x earnings. LICHFL EPS = ₹100 → Fair value = ₹1,500–₹3,000 (but market’s like “nah, you’re PSU-adjacent”). Realistic fair range (considering lower growth): ₹700–₹850.
Method 2: P/B Valuation Book value = ₹700 → Typical HFC trades between 1–2x P/B. Fair range = ₹700–₹1,400.
Method 3: DCF (simplified) Assume loan book CAGR 10%, NIM ~3%, ROE 15%, CoE 12% → Fair value ₹750–₹900.
✅ Fair Value Range (Educational Only): ₹700 – ₹900 (This range is for educational purposes only and not investment advice.)
6. What’s Cooking – News, Triggers, Drama
Q2FY26 PAT at ₹1,353.87 crore — stable, no nasty surprises.
Loan portfolio crossed ₹3.11 lakh crore, up from ₹2.87 lakh crore in FY24 — a strong 8% growth YoY.
Digital disbursements touch ₹2,150 crore; HOMY App adoption rising fast.
New Chairman R. Doraiswamy Ramachandran (Oct 2025) — LIC veteran expected to add governance polish.
NPA down to 2.51%, thanks to tighter recovery focus and possible ARC sales.
ARC sale of ₹250 crore bad loans (FY25) already executed.
Dividend ₹10 per share, because old-school companies still believe in paying shareholders.
Question for readers: When a company with ₹5,500 crore profit trades cheaper than your local gym franchise, what’s the market really smoking?
7. Balance Sheet
Particulars
Mar’23
Mar’24
Sep’25
Total Assets
₹2,78,559 Cr
₹2,91,293 Cr
₹3,19,156 Cr
Net Worth
₹27,185 Cr
₹31,477 Cr
₹38,516 Cr
Borrowings
₹2,44,913 Cr
₹2,52,618 Cr
₹2,72,849 Cr
Other Liabilities
₹6,461 Cr
₹7,198 Cr
₹7,790 Cr
Total Liabilities
₹2,78,559 Cr
₹2,91,293 Cr
₹3,19,156 Cr
Observations:
Balance sheet expanding steadily, not explosively.
