LIC Housing Finance Limited (NSE: LICHSGFIN) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Praveen Agarwal — Moderator
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Abhijit Tibrewal — Analyst
Analysts:
Unidentified Participant
Mahrukh Adajania — Analyst
Avinash Singh — Analyst
Kunal Shah — Analyst
Vansh Solanki — Analyst
Rajiv Pathak — Analyst
Presentation:
operator
The conference is now being recorded. Ladies and gentlemen, good day and welcome to the LIC Housing Finance Q1 FY26 Investor Conference Call hosted by Access Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal from Accessibility. Thank you. And over to you sir.
Praveen Agarwal — Moderator
Thank you, Manav. Good day everyone and welcome to this earnings call of LIC Housing Finance. From the management team we have Mr. Tribuan Adhikari, MDN CEO and Mr. Lokesh. Mundra, CFO to take us through the key highlights of the results post which we’ll open the floor for Q and A. Over to you Adhikari sir for your initial remarks.
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Yeah. Thank you Praveen. Good morning friends and welcome to all of you to the post earnings conference call of LIC Housing Finance Limited. As you are aware, LIC Housing Finance declared its Q1FY26 results last Friday. Before I start the highlights of the Q1 results I would like to outline. The few developments in the economy over the quarter. In its June 2025 NPC meeting the RBI surprised the markets with a 50. Basis point record rate cut bringing the policy rate down from 6 to 5.50%. And also shifted its stance from accommodative to neutral. Also 100 basis points. CRR reduction was announced which was expected to inject approximately 2.5 lakh crore of liquidity into the system. Company keeping line also reduces rates of. Interest on new home loans by 50 basis points. We set from 19th of June 2025 coinciding with the company’s 36th foundation day. New home loan rents. Home loan rates now start at 7.50 which is very very competitive. The banking system continues to enjoy a. Surplus liquidity position amplified by the CRR cut. And this made availability of funds to HFCs like us, I would say in abundance. With this we present the financial highlights. Of the company for the quarter which is as follows. Total revenue from operations was 7233.13 crores as against 6.6783.67 crores for the corresponding quarter of the previous year up by 7%. Outstanding loan portfolio stood at 309587 crores as on 30th of June 2025 against 288665 crores as during the same period of last year, reflecting a growth of 7%. Individual home loan portfolio at 262411 crores as against 246275 crores, again up by 7% and comprising 85% of the total loan book. Total disbursements for the quarter were 13,116 crores as against 12,915 crores. Out of that, disbursements in the individual home loans were 11,247 crores as against 10,932 crores.
Disbursements in project loans were 156 crores as against 521 crores for the same period of last year. We have seen disbursement pick up gradually during the latter part of the first quarter and in the month of July. Interest Net interest incomes to that 2065.78. Crores for Q1 of FY26 as against 1989.08 crores of Q1 FY25 up by 4%. Net interest margin for Q1 stood at 2.68% and against 2.76% of Q1 of FY25 and 2.86% of Q4. FY25 PBT for the quarter was 1699.16 crores as against 1628.43 crores in Q1 of FY25 N 1769.58 crores of FY25 eat for the quarter stood at 1359.92 crores as against 1300.21 crores for the same period of the previous year. In terms of asset quality, stage 3. Exposure default as on June 30, 2025 stood at 2.62% as well as 3.30% as of June 30, 2024. Total provisions as on 30th of June 2025 stood at 5,051 crores, reflecting a provision coverage of approximately 51% as against 50% during the same period of last year and 51% of Q4. A technical write off of 30 crores have been made in the quarter. On the funding side, our cost of. Funds stood at 7.50 as on 30 June 2025 as against 7.76% as on 30 June of last year and 7.73% as of 30th of March 2025, reflecting a reduction of 26 basis points YoY. Our incremental cost of funds today 6.97% for Q1 of FY26, as compared to 7.66% for Q4 of FY25 and 7.82% for Q1 of FY25. All in all, the first quarter of. The financial year has been quite flattish, if I may say so, but we are seeing traction moving forwards. And usually the case, Q1 is a bit slow, we are a bit slow to take off, but we are very confident of movement, of accelerated movement happening in Q2, Q3 and Q4. With this brief introduction, I’d like to invite you for the queries. For your queries. Thank you.
Questions and Answers:
operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have a first question from line off. Maruk Adajania from Noama Wealth Management. Please go ahead.
Mahrukh Adajania
Hello, sir.
Tribhuwan Adhikari
Morning.
Mahrukh Adajania
Hi. Hi. So I first had a question on credit cost. So our guidance was 9 to 15. Right. And our credit costs are much higher than that range this quarter. So. How does it pan out going ahead? Because recoveries don’t seem to be coming through in the way we had envisaged. And anyways, a lot of people are. Reporting. You know, however small, some incremental stress in asset quality. So where do we stand on that front? That’s my first question. And then I have others.
Tribhuwan Adhikari
Okay, Maruk, as regards the credit cost, the credit cost for Q1 of FY25 is at 5 basis points. Right. And if you compare this for the whole of last year, it was about 9 basis points. Yes, I do agree. Like others, we are also witnessing some pressure on the collection efficiencies. There is a slowdown in the month of June, but we are not worried because by and large, our June quarter is slow. Largely because we here in Lichfield, during. The months of May and half of June, I would say first half of June, this is the promotion and transfer season for all of us. So there is a lot of movement. Of personnel from place to place and from vertical to vertical. So that does dampen the kind of effort and the focus that there is. So we’re not worried that the guidance which we had given for the credit cost. I believe we’ll be able to maintain it going forward. There has been a slight increase in provisioning as well as a slight increase in NPAs. NPAs have gone up by about 500 of course during the quarter. But we are not worried. I think we can recover that. We are seeing signs of recovery already in the month of July. Now that all my personnel, my resources are settled down and in place have taken over their new positions, new postings. So we are, I believe in Q2. And later quarters we will continue to do well like we’ve done last year. Of course there have been no big resolutions this quarter. Many of many sort of big cases are in various stages of legal recourse and discussions and negotiations. So hopefully looking forward, I think we. Could look forward to resolution of our not two big cases which would considerably impact our credit cost and RNPs and provisioning. Of course.
Mahrukh Adajania
Yes.
Unidentified Speaker
Yeah. So you just see the last year Q3 and Q4. So that time the credit cost was negative in Q2. Q3 that was negative by 0.07% and in Q4 it was just 4bps only. So in totality last year it was 9bps. So definitely what our MD and CEO is saying. So they’ll maintain the our credit cost within the limits.
Mahrukh Adajania
Sure. No, what I meant was that if you annualize that 192 crore of provisions, then it works out to 25 basis points. But anyways, so what was.
Unidentified Speaker
Sorry, yeah, it cannot be like that. It’s not like your interest cost. You are just multiplying freight cost of 1/4 by 4. That is not the correct way. So if you just compare with the last year’s figures. So in Q3 it was negative and Q4 it was just 4bps. So I’m sure that in the coming quarters it will come down.
Mahrukh Adajania
Because of recoveries.
Unidentified Speaker
Yeah.
Mahrukh Adajania
Okay. And so what was the softness? You said there was some softness in June in which pockets in general?
Tribhuwan Adhikari
Basically in the retail segment. Margut, basically in the retail segment. So whatever NPA increase, we have seen 500 crores as I said, mostly in the retail segment only. And that is where we are seeing some pressure on the the collections. But I believe it’s nothing worrying and I think going forward this can be made up. We have intensified our recovery operations yet. A part of this loosening or weakening. If I may call it was due. To movement of personnel and posting of. New people into these verticals. Recovery verticals especially.
Mahrukh Adajania
But that is sure. And July has recovered.
Tribhuwan Adhikari
Yeah. To Some extent, of course it’s not huge, but yes, to some extent it. Is much better than what it was in June.
Mahrukh Adajania
Okay. And so just on growth then the disbursement is soft this time I am talking about yoy, not qq. So how do we scale it up from current levels? Because competition is also intensifying and I’m told that you banks are now trying to compete across segments and you know, their rates are also very favorable. So in that context, how do we build up?
Tribhuwan Adhikari
Yeah, true. As far as the competition is concerned, competition is intense and unfortunately lichfl we. Are competing with banks because we are mostly into the prime segment into which banks are. Yes, there is a lot of competition. There is a rate war going on and literally. Of course, as far as the rates are concerned, we have also come down to the bank level. So we are offering loans at 7.50. Which most of the bigger banks are offering. There are some smaller banks which are giving loans that’s even lesser than that. So yes, well competition of course is. There and is expected to be there in this segment. Also the other part of it, why I would say growth in disbursement was slightly low in Q1 partially the rate cuts of February to April, 100 basis points. If you. Banks are directly linked to. The repo rate, the lending rates of banks are directly linked to the repo rate. So as soon as there is a repo rate cut, the rates automatically get reflected the lending rates by the banks. Unfortunately we have fortunately both ways I. Would say we are linked to a. Plr, not to the repo. So we have to take a call on what to do with the rates as and when the rate cut is there. To some extent I do agree. I think we were slightly delayed in lowering the rates. The banks cut it immediately. Of course they had to cut it immediately since it was linked to. Therefore we took our time slightly, probably a little bit more time than what should happen. So that was one of the reasons and the other reason I personally feel people in India are smart. I believe they are all aware that there is a cycle of reduction in rates going on and maybe waiting for the cycle to finally conclude or come. To some finality before they take a call of entering the thing. So yes, there was a slight, I would say a lesser demand than what. Was expected when the rates were cut. We were expecting a huge boost to the demand that did not happen and again that was witnessed across the industry. But hopefully going forward I believe they should pick up. And of course our movement of personnel and people that also has an impact in the diversity in Q1. And as I said, that is over. So Q2 in July there has been better growth. We have done better in June than in July. So going forward we do expect these divestments to grow.
Mahrukh Adajania
Okay sir, thank you, thank you, thank you.
operator
Thank you. We have our next question from the line of Avinash Singh from MK Global. Please go ahead.
Avinash Singh
Yeah, hi, good morning. Thanks for the opportunity. So, couple of questions. The first one is now, I mean as RBI has cut 100 basis point repo rate and the housing loan interest had gone down. So my question is that, I mean on your existing book that is largely, I mean floating rate, how much of that book had been repriced and how much is yet to be repriced? So basically assuming that, I mean the rates stay where it is in the repo rate, what kind of yield side compression you see over, I mean the next two quarters.
And given that your borrowings are also repricing quite fast this time, what kind of overall mean compression do you see over the next 2 3/4?
Tribhuwan Adhikari
Yeah, Avinash as well as 100% repo rate has been cut. And you said that the cost of home loans have gone up, gone down everywhere. Well that’s not true. Public sector banks have done it because. They are linked to the repo rate. They have no choice, they are no alternative. But if you look at the NBFCs and HFCs, as far as I know. From my personal knowledge, apart from lic, Housing Finance and fin homes, nobody else has sucraped hdfc. Maybe to some extent, but others are where they were. Yeah, the cost of borrowing I think. Has gone down to some extent but for the existing borrowers they continue to remain where they were. As far as we are concerned we have cut our rates by 25 basis. Points for existing borrowers. Also it came into effect on 1st of June. And now since our loan book is comprised of loans with monthly reset and quarterly reset, approximately 1/3 of our book has already been repriced. The remaining 2/3 get into repricing from 1st of July. So that will have some impact on our, I would say the yield on advances. If I talk of yield on advances, the incremental yield has. Incremental yield on advances has come down by about 50 basis points from 9.4 at the end of Q4 of last. Year to 8.9 and cumulatively it has. Come down by about 19 basis points from 9.79 to 9.60. Comparatively if you look at the incremental cost of borrowing. The incremental cost of borrowing has come down by 69 basis points from 7.66 to 6.97. And the cumulative, and the cumulative cost. Of borrowing has come down by 23 basis points and 7.73 to 7.5 billion. So whereas there is a compression in the yield on advances, there is also compression on the cost of borrowings, net net. I do not believe my NIMs, which. Are at 2.68 as at the end of Q1. I don’t think there’ll be too much. Of a deviation in the nims. Whatever compression is there in the yield on advances will be offset by the compression in the cost of borrowing.
Unidentified Speaker
So if you compare our spread now, so you’ll realize that our spread has increased by 4pps. So now it has, now it has 2.10% if you compare it with the previous quarter sequence at 2.06%. So we are getting more benefit in the cost of borrowing. So incrementally it has come down by almost 69 bps. Okay?
Avinash Singh
Yes, sir. Yes, sir. Yes. In fact that’s why sort of, I mean I saw that spread increasing and that’s why my question was that your peers are largely the public sector bank. I mean your competition is largely private sector public sector bank. And in that context my question was more that the 25 basis point cut you have kind of done on your existing portfolio where what the MD said that 1/3 portfolio has been repriced and the rest will be repriced over time. My question was more that, okay, is 3, 7, 25 basis point cut, I mean makes your kind of offering attractive enough to kind of control balance transfer or will you be required to kind of bring in more cuts? So I mean, is this 25 basis point cut sufficient or will you require to kind of respond with the higher cuts? Thanks. Because your competition is public sector banks.
Tribhuwan Adhikari
True, Avinash. Competition in public sector banks. As of now we have taken the call of 25 basis point cut across the board as of right off now, right now we are not contemplating another any further cuts. Let’s wait and watch. There is not too much of an impact on our, let me say bt. The bt, yes, they have gone up slightly, but it is not, the increase is not significant for us to get into panic mode and start cutting immediately. So right now it’s wait and watch. We are waiting and watching. BTA is at manageable levels and I think we need to watch what happens.
Over a period of time. And if Required. I’m not saying no if required. Yes, we may be required to cut again. But I think we would try to manage our portfolio within the existing levels of the cuts. Whatever we have done.
Unidentified Speaker
And Avinash, we are also hopeful that in the coming quarter our cost of borrowing will further come down by 5 to 10 bps. And you know our our fresh loan rates, it starts from 7.50% onward. So it is in line with the other PFC banks.
Avinash Singh
Okay. Okay. Thank you sir. Thank you.
operator
Thank you. We have our next question from the line of Rishabh Seth from Karma Capital Advisors. Please go ahead.
Unidentified Participant
Hi. Sorry. No, no. My question. Thank you so much.
Tribhuwan Adhikari
Thank you. Thank you.
Unidentified Speaker
Thank you.
operator
Thank you. We have next question from the line of Vansh Dolanki from ISPN Ventures. Please go ahead.
Vansh Solanki
Hello. Good morning sir. Actually I have a question on a project finance growth. So if we seen this part, it is quite muted. So is the. Let’s see. Housing finance, want to grow the product finance or what? And how we. How the management is seeing growth in that sector. And also if we see the overall growth, it is almost a stable same as Q1 of our 24. There is no growth. You can say. So what are the in market and what do you say about this?
Tribhuwan Adhikari
Yeah, one sure. Yeah. It is not that we are withdrawing from the project finance market or the construction finance market. We are there. We are there. Yes, we are. We are slow because we want to. Finance only reputed and builders with pedigree. Our past history, as you all know in the project finance space has not been great. There was a point when 54% of the construction finance book was NPA. We have recovered from that. We have recovered from that, learnt a lesson and we are going slow. But we are definitely there in the project finance market and we want to grow our books. As to why the project finance disbursements were low in the quarter. If you. If you understand project finance, the disbursements are not like retail loans where you sanction a loan and immediately the loan gets taken off the project finance are there. We have sanctioned about 800 crores of. Project finance in Q1 of this current year. But the disbursements are linked to stages of construction, right? So over a period of time as. The project starts getting constructed, the disbursements will happen. I’m not worried yet. 156 crores of disbursement as against what. 521 crores does appear to be some kind of a shocking sort of downfall. But it’s not worrying. It’s not worrying at all. We are into the project finance book. We are assessing appraising loans to credible and at least BBB rated builders and. We are hopeful for recovery in this. Already 800 crores have as I told you these would be disbursed as and when the construction happens and there are. Various other loans. Which we are assessing at the moment and would be disbursed in the current quarter and offtake would happen in the some of it in the current quarter and some.
Vansh Solanki
Okay, and the second question is on my liquidity that is there any excess liquidity at the end of Q1 with us. Our liquidity?
Tribhuwan Adhikari
No, I think we don’t have any such liquidity because our borrowings are exactly. Linked to what we need or what is our. What our requirements are. So maintaining liquidity would be the cost. We are very calculated as far as how much we need to borrow and that is linked to our internal approvals as the kind of disbursements we expect to make over a period of time. Overall, the liquidity in the system we. See there is in my opening remark, the liquidity in the system is there. The rbi, the steps taken by the RBI have improved liquidity in the system and there is no constrained or any, I would say difficulty in raising loans and advances from the market funds are available. The only question is at what rates. They are available because we are negotiating whatever benefits we can get as has been witnessed by our. We wanted to come down, to come. Down further and we are seeing a good traction. Just for example, very recently we borrowed 2000 crores at 6.75% which. Whereas our. Overall borrowing cost is at 7.50 the incremental borrowing cost for the quarter is at 7.50. So hopefully going forward with liquidity in the system borrowing costs will be.
Unidentified Speaker
That’s why I want to add something. So as you said that ample liquidity is there so we are getting benefited and as you know our cost of borrowing, especially incremental cost of borrowing has come down below 7. That is as of now, as of 30 June it has come down to 6.97% only and we are hopeful that in the next three quarters it will further go down.
Vansh Solanki
Okay, and the last question is in my GSP and NPA like if I go by the numbers, exact numbers, it is approx. 400, 200 crores increased in a GNP if I’m. If I’m right and our NNP, I mean the provision is increased by 150 or 200 orders only. So is the another increase in GNP for just for a technical right or just because the like because of 12 days or 1 week there is a customer isn’t and just for bookkeeping it came into GNPA number because because of that and how much recovery management is expecting for throughout the year. If you have a odd number in your mind.
Unidentified Speaker
Our asset quality is improving gradually. If you Compare with the Q1 last year Q1 that time our gross NP was 9512 so if you compare with that figure so it has now 8115 only and our asset quality is 2.62% if you compare it with the previous year corresponding quarter it was 3.30%. So we are we are operating in the line in the correct way and our asset quality improving gradually.
Vansh Solanki
Yes, my question was is the GNP is increased more than nnpa so the difference between between the both are just because of a bookkeeping because customers didn’t pay for a seven, eight days and then it repays but just for a bookkeeping of for the 90 days period it came in to GNP number as of the quarter one end that was. There was my question actually.
Tribhuwan Adhikari
NPA ratio Yes it has. It has gone up slightly. If you look quarter to quarter it was 2.47 as at the end of. Q4 right now it is 2.62 year on year. Of course there is an improvement partially. Because yes in Q1 I would say the NPAs the Sage 3 eat has gone up by 514 crores. Yes there was a. We have witnessed some pressure on collections delinquencies in the retail I would say have been slightly more but this has also been contributed by I would a movement of personnel or resources because the month of May for HFL is the. Month of promotion and transfers A lot of movement of personnel from place to place and from vertical to vertical probably. Because that But I am not worried. I am not worried usually Q1 this is a trend year after year and Q1 is a slightly slow. We do tend to recover in Q2, Q3 Q4 so I am sure that the asset quality will improve further going forward and there should not be any such problems. RPCR continues to be in that 50. 51% bracket so adequate provisions are in. Place so there’s nothing to worry. As far as the NPA front or the stage three front is concerned. 30 crores of write off was done so. It is not significant. Not that we have significantly written off a Big amount, you know 30 crores in the current quarter.
Vansh Solanki
Okay, okay, that was from me. Thank you sir and all the best.
operator
Thank you. We have our next question from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah. Hi sir. So firstly maybe you indicated not too much of pressure on balance transfer at this moment. But generally in the past we have seen that LIC housing has a history wherein it comes in one quarter wherein there is a lot of repricing pressure and we reset the rate lower and then yields come off and decline in one single quarter. So how we are protecting ourselves against that kind of a risk Because I think any which competition is huge and we will see the pressure and we have just cut PLR by 25 basis points here.
Tribhuwan Adhikari
Yeah, answering your question, as I said right now we are not witnessing too much of a pressure and I would say we are not witnessing any abnormal pressure. Yes, historically you are right that BTs have been sort of higher for LICHFL. That means there is more business moving out than moving in in the form of bts. So the current trends, they continue to be at those same levels and are. Not alarming at all. So what we have done, yes, we have made a provision called rewriting of interest rates available to our customers. Any customer currently say probably at 9, 9.5% can rewrite his loan at 8.75 if he wants. So we have made that facility available to the borrowers. Many of the borrowers are opting for that rather than transferring their loans they are opting for rewriting. And the other part of it is yes there will be because of the intense competition and the banks lending being. Linked to the repo. There will be pressure on us. We are aware of that. We have our teams in place. Our teams are monitoring every VT and trying to convince the customer to stay with us for various reasons we are offering them additional loans, etc. Etc. Etc. But again since the market is so competitive, it is all at the end of it. It is going to be a big game of margins versus growth. Right. So we as a company we need to take a call as to whether we really need to grow the book. At almost minimal or no spreads or. We need to protect our margins and what I personally feel given a portion of shove and if our backs are. To the wall, I would prefer to protect margins rather than look at growth. That is what the strategy is at the moment.
Kunal Shah
So maybe fair to assume that then. Growth will also maybe continue to be very modest. In fact a few quarters back we. Have been Indicating we would want to get towards double digit. But given maybe the focus on margins and this kind of a competition with. Banks being very aggressive, should one settle with maybe 7,8% growth for you?
Tribhuwan Adhikari
Well at the moment Kunal, honestly I’m not indicating that. I’m not guiding towards that. We would like to wait and watch in the second quarter what happens, what is happening and then probably take a call and maybe in the analyst call. Of Q2 I would be able to give you a better idea of what we are looking at, what numbers we are looking at growth. But I am very clear in my mind that if at all it comes. To choosing between growth and margins, I would choose margins.
Kunal Shah
Okay, got it. And last one on the overall yield breakup you mentioned incremental yields are 8.9. If you can just highlight in terms. Of how the incremental yields have been. In home loan and lep. Yeah.
Tribhuwan Adhikari
Well I don’t have the. Kunal, I. Sorry. I don’t have the breakup on home. Loans and projects etc. Overall I have this. What I gave you 8.9 against 9.4 in Q4 of last year
Kunal Shah
Got it. Okay. Yeah, no worries. Yeah. Thank you.
operator
Thank you. We have our next question from the line of Abhijit Tiberwal from Modi Laloswal Financial Services. Please go ahead.
Abhijit Tibrewal
Yeah. Good afternoon sir. Thank you for taking my question. So for the benefit of everyone, just trying to understand, you took your first PLR cut of 25 basis points effective first April and then did you share that you’re taking your second 25 basis points rate cut effective 1st of July. Is that understanding correct?
Tribhuwan Adhikari
Abhishek? We took only. We have taken only one rate cut above 25 basis points as on 20th of 28, 28th of April. Now since our book 1/3 of the loans are on monthly reset, so immediately on 20th of April when we took it, they went on the rates got. For these 1/3 loans, the rate got cut on the 1st of June, right? 1st of June. Yes. And 1st of May. 28th April was the date when the cut was taken. So from 1st of May 1/3 of my book got reset. The other two thirds of my book is on quarterly reset. So that get that got reset on 1 July. But there has been only one rate cut of 25 basis points across the board.
Abhijit Tibrewal
So essentially speaking in terms of TLR, we just taken 125 basis points rate cut until now.
Tribhuwan Adhikari
Yeah, yeah, that’s correct.
Abhijit Tibrewal
Got it. Got it. And like you spelled out earlier sir, during the course of the quarter, if need be, we might look at further PLR cuts.
Tribhuwan Adhikari
Well, yes, Abhijit, I’m praying every day that we don’t need to cut further. But yes, as I said, we’ll take. A call as the scenario unfolds in Q2.
Abhijit Tibrewal
Got it. Okay. So the other question I had was around the asset quality. I’m just trying to understand right now. I mean by this quarter we might want to call out the slippages that we saw as seasonal. You also alluded to the fact that, I mean there are changes that happen at LIC Housing in terms of people movement promotions in the month of May which typically leads to some disruptions. But sir, what I’m trying to understand here is within the different product segments that you have, are you seeing more stress building up today in the lab segment? Why I ask is of late we’ve been hearing that there is stress that is coming in the MSME segment, predominantly unsecured.
But is there reason to believe that somewhere going forward when people don’t have enough money coming in from unsecured loans, they might gravitate towards this LAP product? And sir, to that extent, I mean last one year you also acknowledge the industry has seen very strong growth in lap. So are you also seeing now early signs of higher delinquencies in the LAP product? And sir, related question, if you could also share your segment wise gross state stream that you share every quarter in government score.
Tribhuwan Adhikari
Yeah Anitjit, well if you look at chsl, unfortunately we don’t have a big lab book. We are mostly into IHL 85% of our loans in the IHL segment. The lab segment hardly would contribute about. 12 to 13% of my book, 11% of my book. So there is not too much of a lab book. Whatever delinquencies We’ve noticed in Q1, my state 3 EAD has gone up by 514 crores. Most of it has been in the. Retail and IHL segment. It has not significantly increased in the lap the LRD segment. So most of it is in the retail segment. Yes, I do agree there has been. Some pressure on collections in the retail segment. They’ve happened across the industry. Yes. The other my competitors mostly were into the lab and the LRD business. Maybe they are witnessing like banks are witnessing the MSME segment. They are witnessing some pressures in the lab book. But no, our lab book continues to perform as it is. Worry or concern is in the IHL book where most of the delinquencies have taken place in Q1 as regards the number you’re asking for the stage three numbers. For individual home loans. Our stage three in IHL is about 1.22%. The EAD percentage 1.22%. And the EAD is 3211 crores. What exactly. Abhijit, what are you looking for here? Do I give you the.
Abhijit Tibrewal
So sir, you can give the EAD and so basically every quarter in the earnings call we share the settlement price for ihl, nhi, nhc, non housing, individual non housing, commercial and project loans. The split we typically give the EAD in every earning score.
Tribhuwan Adhikari
You can note it down. In IHL the EAD is 3211.32 crores. And the EAD percentage is 1.2%. In NHC Housing, Commercial and Projects it is 3497.77 crores. The EAD percentage is 24.82. In the NHI which is 1406.18 crores. And the EAD Percentage is 4.25. And in the NH and the overall. ECL it stands at 8115.27 crores with the EAD percentage of 2.62.
Abhijit Tibrewal
Got it sir. This is useful. Thank you very much and I wish you and your team the very best.
Tribhuwan Adhikari
Thank you. Thank you, Abhijit.
operator
Thank you. We have our next question from line of Rajiv Pathak from GC Holdings. Please go ahead.
Rajiv Pathak
Good afternoon sir. Just two questions. One on the disbursement. So Q1 generally tends to be sore but for the full year what is the kind of disbursement growth that you are looking at?
Tribhuwan Adhikari
Rajiv, if you in our con call. For Q4 for the guidance for the. Year we had given a double digit growth as we. Guidance. Right. Q1. Yes, it has been very very muted. Growth has been on about what year? On year 7%. Q1. Q it is about 4.5%. So yes it is slightly muted and. As I said in the beginning that sort of it being slightly low largely to do with the rate cuts and. We being slightly slow in passing on the rate cut. Probably that is my assessment now in retrospect in hindsight. So that was one. And the other is of course the. Disturbance due to the movement of people from here and there. That is also. That does also contribute to a muted Q1 in NIC Housing Finance. Right now I’m not in a position to give you any guidance as I’m sticking to that double digit growth guidance. Right. We’ll wait and watch in Q2 how. Things unfold and how our growth picks up. I’m expecting growth to pick up in Q4 after the. After the Q2 ends then maybe probably. I’ll have a relook at the guidance call of double digit growth and come back to all of you and the markets with what I feel would be the growth guidance of LACHFL for the entire financial year. Coming festival season coming up. This usually is a good season for. All of us and like in the. Past we hope for. We are hopeful of doing pretty well in the festival season. Yeah.
Rajiv Pathak
Can you tell us the monthly dissociation that you have done? April, May and June.
Tribhuwan Adhikari
April. May and June. Okay. April it was 3265 crores. May it was 4580 crores. And June it was 5125 crores.
Rajiv Pathak
Okay so basically if you can, if you have to derive. So last year I think we were at a monthly average of say five and a half thousand crores. Now that we are with 5,000 crores plus in June itself. Maybe this Q2 being better, should we take it to something like a 6,000 crore of monthly diversity average run rate? That would not be too far.
Tribhuwan Adhikari
Should go up there. It should go up there. July has been about 5,500 crores. Right. So it should be August onwards. We should be hitting 6,000, 6,500 crores every month. This will actually festival season it will be higher. Festival season, festive season, it will be higher than that.
Unidentified Speaker
It’s only retail.
Rajiv Pathak
Okay. Okay.
Tribhuwan Adhikari
Yeah. 156 crores only in the entire quarter.
Rajiv Pathak
Sure. Sure, sure. What your concern and sir, on the spread. So I think since we had this benefit of cost of funding upfront in this quarter while the repricing of the yield was slightly that because of the 1/3, 2/3 thing. So we had the spread improvement. But going into the next quarter when you have a period of your loan book getting repriced do you think that the benefit of the cost of fund will be sufficient enough to cushion you?
Unidentified Speaker
Yes. Right now as of June our spread spread is 2.10%. And I earlier told that our incremental cost of borrowing has come down by 69 BPAs. And in the coming quarters we are expecting that it will further come down by 5 to 10 BPAs. So in nutshell what guidance we have already given that is weapon 2 2.6 to 2.80 then definitely we’ll maintain that.
Rajiv Pathak
Okay, so means there’s a possibility of 210 being maintained or even go up if you have this benefit on the first of months.
Unidentified Speaker
Yeah, maybe. Yeah.
Rajiv Pathak
Okay. Thank you so much. And we show all the best.
operator
Thank you. We have our next question from the line of Z from SCON Field Strategic Advisors. Please go ahead.
Unidentified Participant
Hey, thank you for the opportunity. Just want to follow up on your earlier comment that for borrowers who want to BT out, we have made available, you know, percentages allowing them to reprice at a lower rate. Just all double check. Did I hear you correctly that you know they can reprice 75bps lower if they chose to ask for it?
Tribhuwan Adhikari
Yeah. Mr. Garvitz, something like this. Yes. Not all our borrowers are at very. High levels of rates of interest. Yeah. But borrowers trying to go out our books, we do. We are offering them this facility. This is available for everyone. It is not that this is a special facility available to only those who. Want to go out. This is available to across the board, to all borrowers. Any borrower who right now has a, I would say a rate of interest, effective rate of interest of more than. 8.75, we are offering them a re rating at 8.75. So that is one of the tools we are employing to retain the existing. Borrowers who want to move out. The other thing is that since they’ve been with us for some time and we are aware of the property collaterals are kind of the value of collaterals if required. If they’re interested, we are offering them. Pop ups and loans on their property to hold them back. So these are some of the methods. We are employing to retain customers rather than letting them go to competitors because of lower rates of interest being offered by the competitors.
Unidentified Speaker
Yeah, yeah. So our business transfer, as you are asking because transfer is hardly, hardly 0.10% per month. Just looking to size our book, that is more than 3 lakh crores. 3 lakh 9000 crores. So thousand crore in. Thousand crore in a quarter. So it is hardly, hardly 0.1%. 0.1% per month. That’s all.
Unidentified Participant
Very helpful. Sorry. This new offering, when did it start that anyone above 3.75 can. Can opt for 8.75 rate. When did we start this program? No, when did we started it?
Tribhuwan Adhikari
Already in vogue. It is already in vogue. We call it rewriting. So anybody as on date having a rate of interest higher than 8.75 can approach us, pay a small amount of fees and get his loan rewritten at 8.75.
Unidentified Participant
Thank you so much.
Tribhuwan Adhikari
Thank you.
operator
Thank you. We have our next question from the line of Chandrasekhar from Fidelity Please go ahead.
Unidentified Participant
Yeah, I just don’t know how much of the bank borrowings are repolied and how much of them have a T +1 pass through. Just trying to get a sense of how much of our entire 31% of a liability book has been repriced with the second 50 bits cut.
Unidentified Speaker
Yeah so about 25% of total borrowing is e dealer and in the current year remaining nine months almost 22,000 crores of NCDs will be repriced. So if you take it bank borrowing plus repricing entities the total total book around 42.96% would be would be floating and the remaining 57% would be fixed.
Unidentified Participant
So have you had a TPS one part two on the entire 100 bits for on the bank forum?
Unidentified Speaker
Yes, yes, yes, yes.
Unidentified Participant
Right. Okay so that’s. We’re not going to get much of an additional benefit on the bank borrowing side. Essentially the delta is coming from the NCD side on a prospective basis.
Unidentified Speaker
So bank borrowings we already got benefit and incremental it has come down by almost 69 BPAs and what we are saying that it will further come down by 5 to 10 BP. So we are getting benefited on our existing borrowing from banks and the scenario of more liquidity in the market and we are getting benefited gradually.
Unidentified Participant
Got it. Second, just how large is the PW pool and just any sense on how much recovery expect during this year?
Tribhuwan Adhikari
Can you come again? I didn’t get what you were asking.
Unidentified Participant
Just how large is your two pool today?
Unidentified Speaker
Can you elaborate more?
Unidentified Participant
Yeah, yeah say a written of pool and just any sense on any recovery of what’s broad?
Unidentified Speaker
We already written hardly written of 30 crores only in this quarter.
Tribhuwan Adhikari
4000 crore.
Unidentified Participant
4000 crores. Yeah. Any sense on what we could recover sometime this year?
Unidentified Speaker
Many, many cases are in pipeline. We are expecting a good recovery in the coming quarters and this quarter we already recovered 60 crores.
Unidentified Participant
All right this last question I think Last year about 89 months back started about an affordable housing which is a 250 bits higher maybe some color on where we are in that process how large it looks today and this, I mean it’s still small but in the overall context but maybe over a year, a couple of years. How large do you think that can become?
Tribhuwan Adhikari
Well right now it’s. We just started it last year in. September onwards, end of September onwards. So we’re still in the process of sort of. We are in the process of building up the infrastructure and the capabilities right now we are not very aggressive on that Taking it slow and steady. So this is a risky segment. We do not want to sort of entangle ourselves in something which we would not like in future. So planning to. We are very much into this segment. We are in a segment which has the growth potential and also the margin potential. So we are going to get into it, but slowly and steadily as we. Sort of build up our infrastructure and efficiencies. Right now it’s pretty slow. But yes, there is some traction going. On month on month. Last year for example, about 458 crores of business came in from the affordable. This year, not having a huge target as such, we will be happy with somewhere around 1000 crores and a lot more buildup in the infrastructure in the suitability you.
Unidentified Participant
Thank you.
operator
Thank you. We have a next question from the line of Raman from Sequent Investments. Please go ahead.
Unidentified Participant
Hello sir, can you hear me?
Tribhuwan Adhikari
Good morning.
Unidentified Participant
Good morning, sir. So I just wanted to. It’s more like a clarification. Can you. You said you are expecting double digit growth during the year. Is it AUM growth or. The anion growth?
Tribhuwan Adhikari
No, no, no. We’re talking about the disbursement, the book growth as well as the disbursement growth.
Unidentified Participant
Okay, that’s it. Thank you.
operator
Thank you. We have our next question from line of Koteshwar Rao from an individual investor. Please go ahead.
Unidentified Participant
Hi sir. Good morning.
Tribhuwan Adhikari
Yeah, good morning. Mr. Rao.
Unidentified Participant
You are discussing the new home loan set sound point five interest rate, right? But how you are trying to reduce the home loan intersect for the existing customer in this year, RBA already reduced it by one percentage, right? But your customers haven’t get that benefit. How can the existing home loan customer get the benefits from LICHF?
Tribhuwan Adhikari
Yeah. Mr. Rao, it’s something like this. HFC housing finance companies. Our business is very simple. We borrow money from the market and. Give it to you individual buyers, right? Right now my cost of borrowing is 7.50 and you want to give it to you at 7.25. How is that possible? That is not going to be possible. Right. So we do a monthly analysis of. What my cost of borrowing is, what my cost of lending is, how much spread is needed. Because it’s not simple that I borrow at 7.5, I lend at 7.5 earned 0. And who then how do I manage. My expenses and my overheads and various other things, right? So as is linked to the plr. The prime lending rate is what we call. We have cut it by 25 basis. Points for all customers. I do not Know if you have. Not got it, you kindly see your. Statement for the month of July. You may be the quarterly reset customer for you. It is applicable from the 1st of. July but we have cut it by. 25 basis points across the board. And going forward depending on our cost of borrowing we will take a call. So if there is a significant reduction. In our cost of borrowing we will definitely like to pass on to our. Pass it on to our customers.
Unidentified Participant
Okay sir, in this case I just a small suggestion. I try to reach out to branch manager and regional manager and they don’t have any enough info to clarif the customer. And also I see some of your agents are referring RBI rates instead of your own. Okay. So it would be better if you discuss properly before discussing the customers. And one more thing, if this same thing continues. Okay. Definitely banks will get the summits rate Banks is offering a better roa. So why I need to invest in housing finance companies like Licorice. In my case I am the investor for LICHFL and as also I am the customer for lic. I took home run but I didn’t get any benefit in the ROI change.
Tribhuwan Adhikari
We also got a 25 basis point cut, Mr. Rao.
Unidentified Participant
No sir, actually I took home loan on May and I didn’t get anything. And bank manager also don’t know when we. You guys are revised regardless roi. So I am in a dynamo.
Tribhuwan Adhikari
No, no May. If you got it in got it in May 25th you would have got it at seven and a half percent.
Unidentified Participant
No sir, no I got at 8.1 according to my. No, no no. At the time eight is the starting one. I got at 8.1 but. But then they didn’t reverse it to as per your changes.
Tribhuwan Adhikari
I hope you understand never had an 8.1 in rate. The rate of interest for individual home loan borrowers is dependent on the civil score and other risk factors. Right. So probably the rate was. Maybe. Maybe the rate was 8%. You got it at 8.1 because of your civil and other related factors. But then yeah. And the cut was in the on the 2028 of April. So you would have got the benefit of that. I don’t understand. Everyone, every customer wants that he should get it at 0% interest. I understand that.
operator
Sorry to interrupt you sir. May please request you to rejoin the queue.
Unidentified Participant
Thank you.
operator
Thank you. We have our next question from the line of Abhijit Tibrawal from North Klalosal Financial Services. Please go ahead.
Abhijit Tibrewal
Yeah, thank you for allowing me a follow up. So just trying to understand One small thing, if you look at your reported Yields, it was 9.7, 9.79. Yes. As of March which you reported at 9.6 as of June. So my understanding is this is based on a period end. Right. So these numbers are as of March and as of June. So. So first is this understanding? Right. The other thing I was just trying to understand, sir, is that if you look at your PLR curves, you share that you’ve taken a 25 basis points cut where 1/3 of the customers are on monthly reset. So this 19 basis points Q2 decline that we have seen in the yields. Right. Is it partly because of this 25 basis points with cut and the remaining delta coming from the newer origination which are happening at lower rates. Is that understanding correct or how should we understand this? 19 basis points due to declining means.
Tribhuwan Adhikari
Perfect. Yeah. This is accumulated 9.60 and 9.79 as at the end of last quarter. There’s 19 basis points is on the. Cumulative yield on advances. Yes, definitely. The 1/3 cut which we 25 basis point cut on 1/3 of our book. Which came into effect on 1st of May would have contributed to some of. This and the other would have been at the incremental lending which we have. Done in current financial year at near about 7.5%.
Abhijit Tibrewal
Got it. And so then because effective 1st July, the remaining 2/3 of the customers will see a 25 basis points repricing. So that impact we will see in the second quarter. Got it. So this is, this is the clarification I needed. Thank you so much.
operator
Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.
Tribhuwan Adhikari
Yeah, thank you friends. I believe we’ve been able to clarify. Most of your queries and your questions. As I said, Q1 has been quite. Short flattish for us. Of course traditionally it is a slow quarter for NICHFs. As in the past we have shown. Traction and growth moving into quarters 2, 3 and 4. This is what we are expecting in the current year. A slightly different market in the current financial year because of the rate cuts. Yes, the companies are under pressure as customers want the benefits of the entire rate cuts to be passed on. In some cases not possible, like companies like hfl because we have to do business, we are a company, we have to borrow and lend. So it depends on borrowing rate. But looking forward, we expect everything to pick up. The growth momentum to pick up for the activities in the market markets to pick up. Of course I do understand competition also will pick up because banks are very, very, very aggressive. But 36 year old company. I think we are poised to take on the market, poised to take on the competition and do ourselves and do well. For us, Q2 is going to be defining quarter for all of us. That will set the course for the financial year. So looking forward to meeting you all at the Q2 conference call and sort of explaining order of performance as well as our way forward. Thank you all for your support.
operator
Thank you on behalf of Axis Capital. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.