LIC Housing Finance Limited (NSE: LICHSGFIN) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Lokesh Mundhra — Chief Financial Officer
Analysts:
Unidentified Participant
Praveen Agarwal — Analyst
Nischint Chawathe — Analyst
Nishit Shah — Analyst
Kunal Shah — Analyst
Sanket Chheda — Analyst
Vipul Kumar — Analyst
Sonal Minhas — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the lic Housing Finance Q3 FY26 Investors Earnings Conference Call hosted by Axis. Ladies and gentlemen, good day and welcome to the LIC Housing Finance Q3 FY26 Investors Earnings Conference Call hosted by Axis Capital Ltd. As a reminder, all participants lined will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing STAR then on your touchstone phone. Please note that this conference is being recorded. I now hand over the conference to Mr.
Praveen Agarwal from Access Capital. Thank you. And over to you sir.
Praveen Agarwal — Analyst
Thank you. Good morning everyone and welcome to this earnings call of LIC Housing Finance. Today with us we have Mr. Tribuna Dhikari, MD and CEO Mr. Lokesh Mundra, CFO. I would request Mr. Adhikari to share his initial remarks post which will open the floor for Q and A. Over to you sir.
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Thank you Praveen. A very good morning friends and welcome to the post Earnings Analyst call of lic Housing Finance Ltd. As you are aware, LICHFL declared this Q3 financial result. Financial year 26 results on 30th of January. Before I start with the highlights of Q3 results I would like to outline. A few developments in the economy over the last quarter and recently. In line with market expectations, the RBI. And its December MPC reduced the repo rates by 25 basis points points supported by a benign inflation outlook. Following this, the company also reduced its. Lending rates on new home loans with effect from 22nd of December 2025. We are now offering home loans at 7.15% onwards on individual home loans which is one of the lowest in the industry. Liquidity conditions which were comfortable at the. Beginning of Q3 due to RBI’s liquidity infusion through a 75 basis point point CRR reduction aged over October and November tightened from mid December. This reversal was driven by factors such. As sustained currency market interventions, seasonal tax outflows, high credit offtake in an environment of relatively subdued deposit growth. In response, the RBI announced multiple liquidity management measures including enhanced VRR operations, US Dollars and INR buy swaps, Sell Buy Sell swap open market interventions with the objectives of ensuring adequate liquidity transmission and supporting orderly market conditions. The 10 year benchmark G SEC yield. Remained under pressure over the last of the past few weeks and amid fading expectations of a near term rate cut by the rbi. Yields have further hardened today following the union budget announcement which happened yesterday which projected a 16% increase in government borrowings of FY26 20 compared to the budget estimate for the current year. Overall, the interest rate environment remains dynamic during the quarter influenced by evolving macroeconomic indicators and policy actions. With this we present the financial highlights of the company for the quarter as follows. Total revenue from operations was 7,187 crores as against 7,057 crores for the corresponding quarter of the previous year.
A growth of 2%. Outstanding loan portfolio stood at 3.14,268 crores as on 31st of December 2025 as against 2.99,144 crores as of 31st December of last year, reflecting a growth of 5% of this. The individual home loan portfolio reported a growth of 4% and comprises 85% of the total portfolio. Total disbursements for Q3 of FY26 was 16,096 crores as against 15,175 crores for Q3 of FY25 an increase of 4% of this the individual home loans disbursement was 13,094 crores as against 12,248 crores. The corresponding quarter of last year up by 7% and loan housing individual loan segments were at 2,304 crore against 2094 crores showing a growth of 10% on the net interest income front, NII was 2102 crores for the quarter as against 2000 crores for Q3 of last year by 5% and as compared to 20.38crores for Q2.
Of the current fiscal net interest margins for Q3, FY26 stood at 2.69% against 2.62% for Q2 of FY26 and 2.70 for Q3 of FY Previous year. Profit before tax for the quarter stood at 1742.51 crores as against 17.93.44 crores. Profit after tax for the quarter stood at 138.3.95 as against 143 1.96 crores for the same period in the previous year. In terms of Asset Quality, the Stage 3 exposure at default stood at 2.45% as on 3112 2025, as against 2.75% as on 31122024 and as against 2.51% as on 30th of September 2025. Total provisions as on 31st December of 2025 is 5105 crores, which translates to a provision coverage ratio of about 54% on Stage 3.
On the funding side, we witnessed a. Continuous improvement in our borrowing costs during the quarter. The overall cost of Funds declined to 7.28% as compared to 7.242% as on 30th of September, reflecting a sequential reduction of 14 basis points. On a year to date basis, the cost of Funds has moderated by 45 basis points from 0.7.73 as on 31 March 2025. The outlook for the coming quarter remains. Positive as Q4, I.e. january and March is always the best in terms of business from company. And roughly 30% of our business disbursed during the entire year comes during the quarter. This gives us conviction of a good financial year in the coming quarter. With this brief introduction, I would like to invite you for your queries. Thank you.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nishint Chavate from Kotak. Please go ahead.
Nischint Chawathe
Thanks for taking my question. The first one is actually on growth. It’s almost been like three years since our disbursement growth is in single digits, you know, and we’ve seen some of the peers, some of the banks kind of growing faster. So what is your view out there? Is it something that we are losing out? Is it something that you’ll probably, you know, make step up in, in investments in, in disbursements to kind of go ahead and gain market share. I understand a part of it is to do with the industry and, but, but still, you know, on a market share basis you could probably, you know, step up a bit.
And in that sense, what is your strategy or what would be outlook for growth out there? And in the backdrop of this, plus you know, the capital position that we are sitting, do we really see dividend payout ratios going up?
Tribhuwan Adhikari
Yeah. Nishanti, I’ll take your disbursement growth question first. Well, first of all, as far as. The industry or the overall market is concerned, well, a lot of competition in the market is what we are witnessing right now. Now, LIC Housing Finance, as you all. Know, as I said in my opening remarks Also, we are 85% in the individual home loan business. My total disbursement, 85% comprises individual home loans amongst the individual home loans. Also we are mostly into the salary segment, not too much into the self employed segment. There is a tremendous competition, especially from banks. Right. The dichotomy is that we are borrowing from banks and competing against them also. So this quarter particularly, I would say with the RBI cutting rates, there’s an intense rate war in the market and. That probably led to a little bit. Lesser disbursement than we anticipated. Beginning of the year. I was very clear that this is going to be a challenging year and given a fight between growth and protecting margins, we would be protecting our margins. So we have been cautious in reducing our rates. The Indian market as such, the housing finance market, people are very, I would say, conscious of rates. So that was one of the, I would say constraints in this quarter. Well, yes, we have taken a call slightly late, albeit a little bit late. We have cut our new loan home rates to 7.15% is among the best in the market right now. And towards the end of December we did see some traction. This change took place, took place on 22nd December. So some amount of traction in December, January, again the traction is showing going forward. Traditionally, as I said, January, Jan, Feb. And March are the best quarter for us. 30% of our business comes during this quarter. This year we expect the share to go up higher, probably 35, 37%. So going forward, yes, we expect the disbursement to pick up. And right now our growth is. The book growth is at. Coming to the book growth. Yes, it is now at 5%. Expecting this to improve in quarter four. Now coming to the dividend payout ratio. Well, that is a call which the board will have to take. Right. Right now the profit figures are reasonably. Okay, not. Anything substantial, but we expect to end the year with at least a 7% increase in profits. About 7,200 is what I expect. Now going forward, let us see how the board takes a call. We have been declaring what, 500% dividend. Let’s see how it goes. Difficult to give a call on the dividends because that’s a call to be taken by the world.
Nischint Chawathe
Got it. So let me put this a little differently. See what I was really looking at is a growth, you know, on a 2, 3, 4 year basis. I mean if you’re growing at 5 to 6%, probably you step up, you know, maybe you can grow at around 8 or 9 or maybe 10%. The point is that is there a plan to kind, kind of say as to, you know, what gives trajectory to grow at a Mid teen level or, or not at a significantly higher level, you know, to, to step up over there over maybe, maybe maybe more from a 23 year period.
And if, if the visibility even from a 23 year period is at, at low levels, then probably there can be some thought process in terms of, you know, you know, the capitalization levels as well. I think, I think that’s where I was really coming from.
Tribhuwan Adhikari
I do agree, I do agree. Right now to be very honest, to be very honest, we are caught off in a sort of a trap, right. We are mostly into the individual home loan segment that to the salaried segment. And there honestly, with so many players, especially the banks being so aggressive in the market right now, that is not. Where the growth is going to come from. I think the growth is going to come from the self employed in the affordable segment. And that is where most of our. The HFE peer group is growing. Right. We have made a foray into the affordable housing segment. We are growing it slowly. We are growing it slowly because again this is something which you have not done in the 36 year history. So very cautious about it. But going forward this is surely going to improve. The other thing is we are also looking internally at the structure of the organization and the way our marketing vertical. Is structured for this. We are in the process of onboarding. I would say special institutions like the big four, the IAMs, etc. We are going into a complete relook. At our structure and see what we. Are doing differently from our competitors which is giving them better growth and not. Giving us the kind of growth we desire, double digit growth we desire. So the onboarding will happen in this month, month of February and the work will start in the month of March. So probably by the end of April. Or May we have a concrete plan in place which we intend to implement. To restructure ourselves for better growth in the coming years.
Nischint Chawathe
Perfect. And just one, one last question is how much juice is there in terms of, you know, funding cost to come down further?
Tribhuwan Adhikari
The funding cost?
Nischint Chawathe
Yeah, to come down further.
Tribhuwan Adhikari
Cost of borrowings, Right.
Nischint Chawathe
Yeah.
Tribhuwan Adhikari
Eventually there has been a 45 basis point decrease in our cost of borrowing. Right. When compared to December of last year? Quarter on quarter also we see.
Nischint Chawathe
No, no. How much is the juice going forward? Do you see any visibility for borrowing cost to come down further, you know, based on repricing or, you know, any of those trends?
Tribhuwan Adhikari
Well, difficult with. See this year we have made a conscious change in our strategy and if. You remember we talked about it in the con call earlier my ratio between. Fixed cost borrowing and your repo rate. Borrowing or the flexible rate borrowing was last year was 55 fixed and 45 floating. This year we have consciously brought it down or rather focused on floating rate borrowing. To be clear, we are mostly focused on borrowing from banks which are repo rate linked. So whenever there is a repo rate cut we get the benefit passed on to us. We have been successful. Now Today as on 31st of December, my fixed and floating, the ratio stands at 50 50. So we have been able to bring down my fixed rate borrowing by 5 basis points and increase my floating rate borrowing by 5 basis points. Now borrowing from banks presents its own problems. As I said, let’s. Yes, they are our competitors right now banks, NIMS also are under pressure. So banks are not very keen on lending at very lower rates or regressive rates. But yes, I feel going forward it’s not going to be much. Not going to be much. 14 basis point cut. What was what we got from Q2 to Q3? Probably 5 to 7 basis points is what we can look forward in. Q4 a further reduction in our borrowing. Cost by 5 basis points.
Nischint Chawathe
Perfect, Perfect. Thank you very much. Those were my questions. All the best.
Tribhuwan Adhikari
Thank you.
operator
Thank you. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. The next question is from the line of Nishit Shah from Bisoli Tech Investment Advisors. Please go ahead.
Nishit Shah
Is my voice audible? Yeah, yeah. So my question was that if we look at the loan mix right, 99% of your loan is floating and when we see at the funding mix it is 50 50. Why is this discrepancy? Because ideally you should match ALM as well as your fixed to floating lending, right? Or is there any strategic advantage that we get by keeping 50 50? No initial.
Tribhuwan Adhikari
There is no strategic advantage in having. 50% of your borrowing at fixed when 99% of your book is floating rate now. But the problem is where is the money in the market? I ideally would want the banks to give me 100% of my loans. But I don’t think RBI would allow that because RBI wants the banks to be deleveraged. As far as funding, certain sectors, all sectors is concerned. So slowly, consciously we try to bring it down. As far as the ALM is concerned, our alms are perfectly matched. There is no mismatch in our ALM. As per the regulatory guidelines. We are perfectly matched in each and every bucket. So there is no issues going forward. We are trying to move to more of floating rate borrowing than Fixed rate borrowing. But then again the availability of liquidity, availability of funds, it all depends on. That because I need to borrow money to fund my disbursements.
Nishit Shah
Right, so we are constrained. Yeah, yeah, go ahead. So are we constrained because of availability? Is that the right way to look at it?
Tribhuwan Adhikari
Yes, yes. The constraint is because of availability. 2 lakh 70,000 crore book, 50% would be one like 35,000 crores. First of all, whatever is my fixed, it has a, it is a fixed, fixed duration, fixed tenor borrowings. And we, they only got of my books when the tenor or tenor or the tenure gets over. So yeah, they will move out. And as they move out we’ll be looking to move towards the floating rate borrowings. But at the same time, again you need to be diversified also. I think a good strategy would be to not put all your eggs in. One basket and rather diversify them. So good to have a mix of mix and floating. Again the mix, you can question the mix, whether 50, 50 is a good mix or say 35, 65 in favor. Of floating is a good mix. That can always be a point of conjecture, but it’s always good to be diversified.
Nishit Shah
So because what is happening is because our, what you say, change in rates are much slower, the difference between banks to an existing borrower, not the new borrower, the existing borrower, what happens is that he is looking actively to switch rather than stay and wait for the rates to come down. I think that is what is happening with us right now. There are more switching which is happening because it is a slower transition, I guess.
Tribhuwan Adhikari
Yes, to answer your question, yes, that is what has happened. And in Q3 we have witnessed that. Because as soon as the repo rates are cut, the banks are directly linked. To the repo rate and automatically their. Loan for new as well as existing borrowers undergoes a change which does not happen in the case of HFCs like us. Yes, as I said, trying to protect the margins, we were a bit slow. We did not lower our prime lending rate. But what we did was. We have. A feature called rewriting in which customers can come to us and ask us to appraise their lending rates and rewrite it at a lower rate. We have reduced our rewriting rates in. The month of October. Of course, moving going down the line. It took some time. So now I think the rewriting which. Was about 3300 crores in Q3, now. It has come down to sustainable and. Manageable levels in the month of January, as I see it. So that is the option we are. Offering to our right borrowers. So what we are basically offering in the form of rewriting is the lending rate or the rate we offer to. A new borrower plus 50 basis points. So that is the rate we are giving which I believe is logical, reasonable and competitive. So this option of rewriting their loans by approaching us.
Nishit Shah
And the last question would be because LIC being our parent we have a huge distribution advantage which I think not many would have. So I mean diversifying our books to say affordable or emerging market because as it is you have I think almost in all PIN codes LIC has some presence or the other. Wouldn’t that be a much better option? Because the differential in rates in affordable and in prime lending are very, very significant.
Tribhuwan Adhikari
Yes, Nichan, perfectly. You’re perfectly right. Differential rates are available and affordable as. Compared to prime lending which is very, very competitive. The other part which you talked about. Yes, it is presumed, I would say or the general mindset is that being. Children of LIC or our parents or promoters being LIC we have the advantage of the huge 14 and a half lakh or almost 15 lakh crores of agents which LIC has its disposable. Unfortunately that is not true. That hasn’t happened over the past year and even now we are engaged with LIC on how do we synergize the. I would say the marketing resources which we have between LICHFL and lic. There are some traditional mindsets working in. The sense that the LIC branch managers feel that if my agent takes up LIC housing finance he’ll stop doing insurance and so on and so forth. We try to talk to. We are consciously engaged with the senior. Management of LIC and trying to churn. Out sort of a synergized strategy. In fact the management of LIC has onboarded a special consultant to work on all these synergies between all the various subsidiaries of LIC and LIC of India. So going forward, yes, I think in the coming fiscal I think we will. See a lot more of LIC agents marketing our home loan products which should give us a very good boost as far as growing our disbursement book and loan book is concerned.
Nishit Shah
Just one small suggestion. Since the next presentations, right. Whatever new initiatives that you are taking, right, for example, having consultants and that. So you just put it in the presentation so that the wider audience is aware what is happening because more of it, I think it is sentiment rather than the performance which is dragging our stock prices.
Tribhuwan Adhikari
Point taken. Fully agree with you. So next presentation you will see this.
Nishit Shah
Thank you. Thank you very much.
operator
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah, hi. Am I audible? Yeah. Yeah. So firstly on balance transfer, after having reduced this rewriting rates, how has been the trend on the balance transfer side? If I heard you correctly, you mentioned like 3300 crores which was last time 4000 odd crores in Q2. Is that the right number.
Tribhuwan Adhikari
2? It was 14 crores to be exact. 3 has. We took this call to.
operator
I would request you to please mute. Your line when the management is answering. There is a lot of.
Kunal Shah
Hello. Yes sir. Yes sir.
Tribhuwan Adhikari
Yes, there’s a lot of background noise. Yeah. So As I said Q2, our BTout was 4014 crores in October, mid October we took this call to reduce our. Rewriting rates and result in the whole of Q3 has come down to 3300 crores. And the average, traditionally the average is about 8 to 900 crores. I think January, I don’t have the exact figures right now but January probably. Would be I think 800 crores of BT out. So BT out is decreasing, BT out is decreasing. And because of our lower interest rates. In new home loans, we are seeing. A bump up in the BT in. Right. So net to net the business loss. Has been marginalized, minimized. And I think in Q4 of course traditionally it has always been BT out. More and BT in less. So net is out. We are, I personally believe with the attractive rewriting rates that we have offered and the very competitive lending rates which. We are giving, I think net net. We should be able to dramatically decrease. The net btout which we have been witnessing in the past two quarters. Kunal, you are there?
Kunal Shah
Yes, I’m there. So given that the overall run rate is still 800, 900 crores, so we should still see 2500 to 3000 crores continuing even in the next quarter.
Tribhuwan Adhikari
No, I think next quarter it will not be 25,300 because if I take 3,000, 3,000 would be what roughly thousand crores per month. Right? You’re talking about the net or you’re talking about the gross btout?
Kunal Shah
No, no gross. You mentioned like in January it was still 800900 crores.
Tribhuwan Adhikari
So it will be, I, I believe it will be in the region of 22 to 25. And our 25 I believe would be on the higher side. I think we should be able to. Restrict it by up to 22 probably.
Kunal Shah
Okay. Okay. So, but still after the reduction also not much of benefit which is coming in, maybe it’s come down but definitely not to the levels which we had seen earlier because of the competition that is on.
Tribhuwan Adhikari
No, if you compare Q2 and Q3, Q2 was when we took the full hit of 4000 odd crores and Q3300. So 700 crore reduction in one month. And that too we announced this rewriting the mid October and any change, any change in directions, et cetera does take. Time in reaching the customers. So I think October, November and December. November I believe it would have percolated down so probably December the effect would have come. So it’s not the full effect which we are seeing. Despite the partial effect of this rewriting which we have offered, we have seen. A reduction of 700 crores approximately in the quarter. So now that the messages are all through, we have advertised it, publicized it very extensively. We have sent mails to all our existing customers. So definitely there’s going to be more. Further better reduction in Q4 as compared to Q3. Sure.
Kunal Shah
And any plans to. Sorry.
Lokesh Mundhra
So actually we have reduced our lending rate to 7.15 onwards in December only. And now what we are offering we are just giving 50bps plus on our fresh lending rate. So effect of this BT out that will definitely come down in the next quarter. Q4 because the rates were reduced in December only.
Kunal Shah
Yeah, yeah, yeah, got it. And any plans to reduce the plr? Last time you clearly indicated no plans to reduce the plr. But now given maybe, no doubt you have reduced it on the new home loan rate. But we have not tweaked the PLR on the entire outstanding portfolio assets. So with this BTOUT coming down there is still no plan to cut the plr.
Tribhuwan Adhikari
No, we are not Kunal. We have consciously not cut the plr but we have cut the entire video of our. The entire book by 25 basis points. So it has not been a PLR reduction but we have given a benefit of a reduction of 25 basis points on the existing lending rate to all customers. All existing customers. This was with the effect from. Your pardon? This was with effect from. I think it was effective from April. April of this year.
Kunal Shah
Okay. Okay. So that’s what. So maybe this 25 which was done in April, post that there is no change.
Tribhuwan Adhikari
Yeah, in April we made this cut of 25 basis points for. For the entire loan book. Yeah. So some of it went through in April. For those with monthly resets and those with quarterly resets it went through in from 1 June or 25 basis point cut has already happened. Without reducing the PLR going forward. Let us see if we get a distinct advantage in the lower lending rates. We can think of a PLR cut.
Kunal Shah
Okay. Okay. So we can evaluate that. And the last question was on corporate resolution, anything maybe you indicated Q4, you had a strong visibility. So has it improved further with respect to corporate resolutions in the fourth quarter?
Tribhuwan Adhikari
Oh, nothing sad, but nothing great to report on that front. You know these corporate resolutions, most of these are big loans. Upwards of 200, 250, 400, 500 crores. Yeah, lots of progress made. Lots of progress made. And you know these big corporates, big. Loans, big builders, they use every opportunity at their disposal, all courts, drt, et cetera, et cetera, to stall our expectations. But yes, there is a lot of forward movement in many of these corporate loans could crack. A few of them could crack at any point of time. So again, keeping our fingers crossed, keeping our fingers crossed, expecting many of them to crack. But could happen. Anything could happen. Suddenly you could see two, three big loans probably resolved during Q4, Q4. But you cannot give a guarantee because. These corporate, these big loans, big money. Involved, big corporates involved, big builders involved. Last minute we have seen in Q3 rather at least two cases where almost resolution was totally in sight. Last minute they backtracked.
Kunal Shah
Okay, got it, Got it. Thanks. That’s it from my side.
Tribhuwan Adhikari
Yeah. Thank you.
operator
Thank you. The next question is from the line of Sanket Chera from Dam Capital. Please go ahead.
Praveen Agarwal
Yeah. Hi sir. So just wanted to get a sense on disbursement. You said that Q4 disbursement would improve. Last couple of quarters we have been clocking around 16,000. So how the January has gone by? If you can give us any quantity to sense on that.
Tribhuwan Adhikari
Jan is about 6,000. Exact figures I do not have. Jan is about 6,000 better than your December. And I am going forward in Q3. I expect disbursements minimum to touch 20,000 crores. Q Q4 should minimum be 20,000 crores in retail. I’m not adding project to it. Right. So 20,000 crores in retails and about 1500 to 2000 crores in project should get us to 20,000. 22,000 crores in Q4. Okay. Okay. And.
Sanket Chheda
And how do we see a margins from here on? Sir, have we seen any, any uptick on the NCD cost, whatever the NCDs are coming for replacement of late?
Tribhuwan Adhikari
No, not much. I think we have about 8,000, 7,000. 8,000? Yeah, it is 7,799. Crores to be exact. NCDs which are approximately priced at about 8%. Yeah, these are going to go out of my books in the next whatever up to March. And as far as new borrowings are concerned, the liquidity in the market. Okay, so. So and now with the government having announced huge borrowings in Q3, I do not know what the rates are going to work at. Since yesterday we hear that the rates have really blown up. So any keeping our fingers crossed and. Hoping that because the borrowing cost is very, very important to us. In fact entire margins depend on that. With a lot of pressure on new home loans being offered at very competitive rates. The competition with banks is very intense. But yeah, I’m happy to tell you that we’ve been able to protect our margins. NIMS at 2.69. Right. So. I guess 2.62 at the end of previous quarter. That’s been an uptick of seven basis points going forward. Not. I do not see this going up to. We had given a guidance of 2.6. To 2.8 at the beginning of the year. Definitely will be within the guidance but I expect it to be somewhere around 2.70. 2.723 basis points improvement is what I expect in Q4.
Sanket Chheda
And lastly, how much time was in. Your term and is it likely to get the term?
Tribhuwan Adhikari
Well, I. I superannuate on 31st August 2026.
Sanket Chheda
Okay, sure sir.
operator
Thank you. The next question is from the line of Gaurav from JP Morgan. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for taking my questions. Am I audible?
Tribhuwan Adhikari
Yes. What have you ordered?
Unidentified Participant
Thank you. I just wanted to understand a bit better about both the demand dynamics in the market as well as your ability to deliver the 10% growth that you had initially guided for in terms of subtly mortgage housing volumes. We’re seeing that volumes are coming up consistently for the last few months. Sales value are declining. How do you think about this entire demand outlook over the next few months and what do we need to see to get to a higher growth level? Thank you.
Tribhuwan Adhikari
Yeah, Gaurav, honestly, Yes. I would not say the market has. Been very compressed or anything of that sort. I think the demand is normal. What we witnessed in Q1, Q2 1 Q3 was there. Yes, to some extent. I personally feel of course there’s been. No study on that. But Indian customer, as I said, very. Rate conscious and with RBI cutting rates almost 125 basis points in Feb. Of last year, huge clamor in the market that probably Feb MPC will see another rate cut et Cetera, et cetera. So somewhere I get the feeling and there’s a feedback I get that people are willing to wait for probably another. 1 month, 2 months, 3 months, wait for the rates to come down further and take the benefits of new rates. So that is probably one reason where why there’s not too much, there’s not been too much growth on in demands. Number two, I would feel that yes, the intense competition also is creating a. Very savory situation in the market because all companies after the same borrower, borrowers are limited, especially prime borrowers. If I talk of prime borrowers, the segment in week two, mostly into which we are in the prime segment, so many companies chasing the same borrower, huge rate war going on. So that again probably not leading to. A free flow of the borrowers unable to decide and in a quandary what to do, wait, watch or go for the rates which are being offered at present. Probably that is another thing. So going forward, of course in the budget yesterday there was nothing much as far as the real estate of the. Housing finance sector was there. But yes, big boost to the infrastructure sector. Infrastructure means basically constructions and this and that. That in some ways probably would rub. Off on the real estate and the housing sector and we can get the benefit of that. PMAY2 is another area where we see. An uptick happening in Q4 and next year it has just taken off off the ground and we are getting requests and applications. There’s an open portal now a customer can apply and any number of companies can approach him and give him the getting the business from him. Expecting an uptick in the PMAY to urban especially. Yeah. So these are some factors which probably. Will impact or influence the housing market in the days forward. I do not see too much of a compression in demand. Probably RPI does not cut the rates in February, which is what I expect. Believe that people will start taking the. Calls to go taking the positive call to go ahead for the housing loan rather than waiting for a rate cut. Does that answer your question, Gaurav?
Unidentified Participant
Yes, that’s very clear. Thank you. And if I can just ask one more question in terms of your credit underwriting process, how has that changed in let’s say last two to three years? And if you could help us with some details on what would what were your rejection rates a couple of years ago versus how do those look now currently? That will be helpful.
Tribhuwan Adhikari
Credit appraisal sops well, we have a robust credit appraisal sops in place but again these are all very dynamic depending on the market conditions depending on what our competitors are doing. We cannot be taking rigid stands and saying no, we will not do this and we will not do that. Of course uppermost the entire endpoint of credit appraisal is to minimize risk. But at the same time we are. Conscious that we are in the business of lending, which itself is basically intrinsically risky proposition. So we are trying to match the market expectations what is happening in the market as far as other competitors are concerned and adjust our credit appraisal SOP so that we are competitive. Because at the end of the day we have to be competitive in the market.
Unidentified Participant
If I can just rephrase that question a bit. In last six months have we tightened underwriting standards or have we loosened underwriting standards.
Tribhuwan Adhikari
The last six months? Honestly, if you ask me, we have made our underwriting standards slightly more conducive. To the market environment. As I said, there is a huge competition going on in the market for companies like Lich because our competitors are banks. Right. So apart from the rate war which is going on, yes, this SOP war. Is also going on in the market. So banks are willing to take calls, aggressive calls to boost their credit growth, etc. Etc. Etc. And we’ve had to match up with them. So overall in the last six months I would say our credit appraisal sops have got down, have. I will not use the word become. Lacks or anything of that sort but. Yes, we have adjusted them and tried to match what the banks are doing in the market.
Unidentified Participant
Those were all my questions. Thank you very much.
operator
Thank you. Ladies and gentlemen, please press star and one to ask a question. The next question is from the line of Nishit Shah from Visoli Tech Investment Advisors. Please go ahead.
Nishit Shah
Yeah, I’m audible. Hello.
operator
Yes sir, you’re audible.
Nishit Shah
Yes, thanks for taking my question for the second time. More than question, it is what you say for what is it guidance kind of a thing. You said that you have you are going to appoint some consultant to see what are the changes that could be done to improve the business. So I just wanted to know what is the kind of, of flexibility which the company is ready to change? Like for example change in management, change in business mix or change in corporate structure. I mean what is or say have a strategic investor like PNB had a few years back, what is the kind of flexibility that we are willing to go.
Tribhuwan Adhikari
Well, very early to answer that question because see when we are onboarding the management consultant we have give him a. Given him a very wide scope which. Involves looking at the Entire structure of. The company, the way the company is structured, looking at the various verticals within the company, the various components that we have, marketing, recovery, credit, appraisal, taxation, finance, etc. Etc. Etc. Match it with the best practices in the market. Study the competitors and the peers and see what are the best practices in the market. We are also looking, asking them to. Look at the compensation structure which we have employed in the company. As right now is more of a. More of a fixed compensation structure, a. Little bit of variable, but we are. Asking the consultant to look at it. How can the compensation structure or the compensation system be repackaged so that the onus is more on performance rather than payment of fixed wages? That is another the third thing. We are also looking, asking them to. Look at technology, the existing technology which the company has employed, deployed. What is there in the market, what are our competitors doing, what we need to do. So as the digitization or the move towards digitization which is already on in the company, we further accelerated, further I would say hard coded into the DNA of the company. So these are all the actors as far as management change, the change is concerned. Well, that is not one of the scope of the company because the management structure is derived from our articles of. Association wherein we basically top management comes in from lic. So that is something which will need to be, which we will need to engage with the promoters. There have been some talks going on which I cannot divulge at this stage. Yes, looking to a more professional management in the future. Let’s see how it goes about it. Difficult to divulge anything more at this stage. And as far as onboarding a new. What you say stakeholder or shareholder is. Concerned, probability or probably we are. Our car is 24, which is I think good enough right now. So capital infusion not needed for the next two to three years. Going forward, rather than getting in a. New investor or something, we have LIC as our main promoter and LIC is flush with funds. So if need be, if capital is required, we can always go. Of course there can always be an offer to the shareholders in the forms of rights issue or something of that sort. Or we can also go back to. LIC and ask for a further infusion if needed.
Nishit Shah
My question was not because of capital like strategic investor who wishes to play India Store. That was the question.
Tribhuwan Adhikari
Right now, not. In the discussion horizon.
Nishit Shah
Okay, and this transformation, how much time would it take? Say one year, two years after this consultants are being appointed and to come.
Tribhuwan Adhikari
In three to four months time. Yeah, the full after the entire study process is done. The report to come and of course the entire. It would involve engagement of the board also. The board is also keenly. In fact, this is the direction given by the board. The board is also keenly involved in this. Thereafter there would be ways and discussions. Going forward on what the suggestions of the consultant are and what we take forward immediately. What we take forward in a phased manner. How much do we take? Forwarded all. If we take forward, of course there is going to be change. There is going to be change. But how much when that is something. Which the board will have to take a call. So let the report come. We are also waiting with cross fingers waiting for the report to come. We feel that this is necessary view of the existing situation. The company is in sort of. Sort of a stalemate which we are witnessing. We are looking forward to that because we are totally aware of the fact that we need to grow. We need to grow. That is the only area where. Which is probably holding us back. So we need to grow. And we are very open and very keen to adopt practices which will suggestions and practices which will help us grow get out of this.
Let me call it Hindu rate of growth.
Nishit Shah
No problem. Thank you. Thank you very much. And hope it happens sooner rather than later. Thank you.
operator
Thank you. The next question is from the line of Vipul Kumar from Sumangal Investments. Please go ahead.
Vipul Kumar
Hi, sir. Thanks for the opportunity. Since you have reduced your rates to rock bottom at 7.15%. So will there be a margin pressure. And corresponding reduction in NIM in this quarter, sir?
Tribhuwan Adhikari
No, Gopal, we have reduced our race to rock bottom. 7.15% is what we are offering which. Is among the best in the industry. Right? And we have been forced to do it. Let me honestly admit, we have been forced to do it because we are in a competitive environment. I have been time and again harping that we are competing with banks. So when banks are offering 7.15, I cannot say I will not offer 7.15. Given the fact that my customer segment. Or the prime segment I operate in and the segments in which banks operate in is the same. So given the same customer base, I cannot be fighting a war where banks. Are offering 7.15 and I’m offering probably 7.25 or 7.35. So given that, keeping that in mind. We have consciously reduced our rates with the lowest possible. But at the same time, we have also, right from the beginning of the year, we have adopted a strategy of diversing our business from ihl Individual home loans to what we call ohl. Other than individual home loans which basically the market balance is LAP and LRD. And we have been able to get some traction. Of course it is not as much. I would have liked but the share of other home loans in my business book is almost close to 15% right. Right now it used to be about 11 to 12% earlier so there is a 3% uptick. The goal is to take it to. Goal was to take it to 20% by the end of this financial year. Probably will not happen. 20% will not happen. But from 15 to 17 if we can get to 18 I think that. Will be a great progress. OHL gives me the benefit of number. One diversification in my portfolio and number two gives me the benefit of at. Least 150 to 200 basis points additional margin as compared to IHL. So that is what we are doing as far as compression of NIMS is concerned. I don’t think there is going to be any compression. I’m pretty sure of that. 2.69 is where we are at the end of December quarter and I answered a question earlier. I expect this to be probably 2.72. Between 2.70 and 2.72 in Q4. So there is not going to be. A compression in ims.
Vipul Kumar
Thank you sir.
operator
Thank you. The next question is from the line of Sonal from Prescient Cap Investment Advisors. Please go ahead.
Sonal Minhas
Hi sir, this is Sonal Minas. I hope I’m audible.
Tribhuwan Adhikari
Yeah, so now I can hear you.
Sonal Minhas
Sure sir. Thanks for taking my question sir. I just from a disclosure perspective just wanted to understand your gross NPA by the category of loan or slippage, any of that. I presume that’s not part of the deck but if you could help us with those numbers that will help us understand what the previous participant was also asking that have you tightened or have you eased off a little bit of lending going further.
Tribhuwan Adhikari
Well, so now the ready figures I have my total stage three is okay. This is, this is group wide. Overall I look at it, the total, total stage three is 7705 crores as. At the end of this quarter and. As at the end of September quarter. It was. It was, it was 7,830. Yeah, 7,830. So there has been a reduction of almost about 124, 125, 12425 crores in the total stage three. If I talk of the various components. In IHL, the individual home loan it is about approximately 3,000 crores 2,978 to be exact in NHI which basically your LAP and LRD it is 1,311 crores. And in the non housing corporate plus. My builder loans and project loans it is 3,415 to 3,416 total making up to 7,700. There has been improvement in the asset quality. Quarter on quarter. Right now my if you look at it my Overall GNPA is 2.45 which was 2.51 as at the end of last quarter. So there has been a six basis point compression and compared to last year as in December we were at 2.75 the 30 basis points compression that way. So the asset quality is moving in the right direction. Could be better, much better. But again see a majority of my stage three is in the project loan segment. These are all legacy loans, old loans. So again as I said answering to one question they are in much progress stages of resolution. Any of them could crack at any. Point of time and give me a huge advantage. But again as I said now these. Are all big builders the corporate houses so they use every trick in the every trick of the trade to trying to stall especially if decisions are not what they want. So that is one and the other part of it. Yes I would admit that we have been a little bit slow in going to the ARC rule. That is one route which many of my peers and competitors aggressively deploy and employ. So far our total I think if I talk of big corporate loans, one. Case last year that was in fact in the December quarter that was almost about 500 odd crores of outstanding book which was resolved at we had of course we took a big haircut of 1550% on that. So 250 crores came in and that. Is one of the reasons why you. See my pat slightly reduced as compared to December of last year because that big one off was received in the month of December last year. So again these big project loans any of them could crack. Something could happen at any point of time. But what I would say is that we have been very consciously focused on these legacy loans and we are pursuing. Each and everything at every stage in various stage courts in the DRTS and the NCLTS and etc. And I believe at any point of time hopefully touch wood it happens in. Q4 of this year. But we expect resolutions. As far as my retail loans are concerned they are well in control and. We are our delinquencies are in line with what we expect almost in at industry standards in retail Loans. Not much worry of a worry there.
Sonal Minhas
Got it. Thanks for this detailed answer. So my second question was related to individual loans and the lab portfolio that you’re building up. Wanted to understand from a systems perspective given that you mentioned that you are recruiting in consultant, maybe revamping the systems as well. Is there like a systemic kind of a fear that my systems are not up to date because of which if I grow too fast I will build up stress in my books or the systems are at par commensurate to take in 15 to 20% growth. Just trying to understand the stress test of the system in terms of good lending at speed.
Tribhuwan Adhikari
Yeah. Honestly Sonal, if I ask you, I think. I think the systems are in place. We have the systems in place. There is nothing wrong with the technologies we have adopted or the deliverance of the technologies. It is more to do with the mindset. And let me be very clear on this. See if I talk of. Let me talk of two segments. One is affordable and the other is. Your LAP and LRD. Right. So traditionally for our almost about our 36 year history, almost for 34 years we were totally I would say focused. On IHL individual home loans lending to the segment, the salaried class. Probably something to do with being a. Little bit risk averse because this is a segment where the solid documented income where default chances of default are low. So maybe because of that as a company we said that we would do. A focus on individual. We paid very little attention to the. OHL segment, the labs and the lrds. And affordable of course. And the self employed segment was totally not in our radar. And that is what we have been. Doing for the past two years. Tractions have been made see any organization. Very easy to change technology, very easy to change to change products, very easy to change lending practices but very difficult to change mindsets. And I keep on telling my people it telling a person who has been a vegetarian all his life to start eating non veg. So that is. That is precisely the issue which I. Am facing right now. But yes, now slowly, slowly, slowly people. Are realizing people are changing. It is taking time and I understand it will take time. But we are in the right direction and going forward. I think you will see this change in mindset. Technology is perfectly fine. Nothing wrong with technology. Yes, we can tighten up a few. Nuts and bolts here and there. What else about that AI coming in? Again I’m skeptical about AI. Lots of talks in the market. AI this, AI that and this and that. Honestly, I personally feel that the man. Behind the Machine is more important. And so we have to take a. Balanced view and not go gung ho. On AI and forget the human resources that we have. So I think we need to work. On all these funds, both the fronts, the human resource front as well as. The AI front and more importantly on. The mindset front, which needs to change.
Sonal Minhas
Sure, sir. Thanks for explaining. Sir. I’ll fall back into. Thank you.
operator
Thank you ladies and gentlemen. Due to time constraints, that was the last question for today. I now hand over the conference to management for closing comments.
Tribhuwan Adhikari
Thank you friends. Thank you for these various incisive quotes or the questions which you asked. Yes, the company is okay. I think it’s doing okay. But yet I understand market expectations are much, much higher. And rightly so. Rightly so. For a company which is the biggest housing finance company in the market, the expectations need to be higher. We need a push in the back. Or a kick in the back if I may say so, to push us forward. We are consciously engaged toward that. Let me assure each and every one of you, we are not at all satisfied with the rate our growth and the delivery of performance. We realize we are capable of doing. Much, much, much better. The company, the stakeholders, the management and the board is consciously aware of this and the board is really pushing us hard to bring about what structural and mindset changes are required. And as far as the position in the rusty is concerned, I think we. Are the oldest housing finance company, single product company. So you can say we are the experts in the business. We do not sell any other product. Our domain is only in the housing finance. So we are. Well, I think I would say we have the experience and the expertise to do this business. As far as competition is concerned, I’m repeatedly saying we are very competitive in the market. As far as interest rates are concerned. 7.15, the lowest in the industry. And I Feel going forward, Q2 Quarter. 4 is going to be a very good quarter for all of us. Whether it is the asset quality front, whether it is the margins front, whether it is the business front and loan book front. I think it is going to be good. Thanking all of you for engaging with us and looking forward to delivering a very satisfactory and good performance in quarter four. Thank you. Thank you all.
operator
Thank you very much on behalf of Access Capital Ltd. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.