Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
LIC Housing Finance Limited (NSE: LICHSGFIN) Q4 2026 Earnings Call dated May. 14, 2026
Corporate Participants:
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Unidentified Speaker
Lokesh Mundhra — Chief Financial Officer
Analysts:
Praveen Agarwal — Analyst
Kunal Shah — Analyst
Sanket Chheda — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the LIC Housing Finance Q4FY26 investors conference call hosted by Access Capital Limited. 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 this conference call, please signal an operator by pressing Star then zero on it at stone four. Please note that this conference has been recorded. I now hand the conference over to Mr.
Praveen Agarwal from Access Capital Ltd. Thank you. And over to you, sir.
Praveen Agarwal — Analyst
Thank you, Shaknali. Good morning everyone and welcome to this earnings call. Today with us we have Mr. Tribavana Dhikari, MD, CEO and Mr. Lokesh Mundra, CFO to discuss the results. I would request Mr. Dhikari to share his initial remarks on the results post which we’ll open the floor for Q and A. Over to you, sir.
Tribhuwan Adhikari — Managing Director and Chief Executive Officer
Yeah. Thank you, Praveen. Good morning and welcome to all of you to the post earnings conference call of LIC Housing Finance Limited. As you are aware, LICHFL declared its Q4 financial year 26 results yesterday. Before I start the highlights of the Q4 results, I would like to outline the few developments in the economy over the last quarter. Over the past few months, the global economy has been navigating heightened geopolitical uncertainty arising from the evolving situation in the Middle East.
The conflict has resulted in volatility across global financial and collaborative markets, particularly in crude oil prices. Concerns around supply distributions and logistic bottlenecks have led to intermittent spikes in crude prices which have implications for inflationary expectations, currency movements and global interest rate outlooks. The increase in oil prices has exerted pressure on the Indian rupee and could potentially impact imported inflation if the situation persists for an extended period.
However, India’s macroeconomic fundamentals continue to remain relatively resilient supported by healthy GDP growth, stable financial sector conditions, adequate foreign exchange results and continued government focus on infrastructure and capital expenditure. Against this backdrop, the RBI maintained a weight in watch stance in the first NPC for FY27 and flagged further escalation of the conflict. Elevated energy prices, weather related events including the emergence of El Nino conditions, slowdown in exports and heightened volatility in the global financial markets as a downside risk to domestic growth.
While liquidity conditions have remained broadly adequate, the RBI continues to closely monitor inflationary trends, global commodity prices and external sector developments while balancing the growth inflation dynamics coming to the housing finance industry despite external uncertainties. Domestic mortgage demand has remained reasonably resilient. Structural drivers such as urbanization, favorable demographics, rising income levels, increased aspiration for home ownership and continued policy support for housing continues to provide long term growth visibility to the sector.
With this we present the financial highlights of the company for the quarter as follows. Total revenue from operations 7,194 crores as against 7,281 crores for the corresponding quarter of the previous year. Outstanding loan Portfolio stood at 3.20,707 crores as on 31st March 2026 as against 3.7732 crores as on 31st March 2025 reflecting a growth of 4%. The Individual Home Loan Portfolio stood at 2.70,893 crores as on 31st march 2026 as against 2.61,562 crores as on 31st march 2025, up by 4% and comprising 84% of the total portfolio.
Total disbursements for the quarter were 21,019 crores as against 19,156 crores for Q4FY25 up by 10% out of that disbursements in the individual housing loans were 16,672 crores for Q4 of FY26 as again 15,383 crore for Q4 FY25 up by 8% and non housing individual loan segment were at 3348 crores as against 2,676 crores up by 25% whereas project loans were at 847 crores compared to 875 crores in Q4 financial year 25. On the net interest income front, net interest income was 2,222 crores for the quarter as against 2102 crores for Q3 of FY26 and 21.65crores for Q4 FY25 showing a sequential growth of 6% Q on Q and 3% on on YOY basis.
Net interest margin for the quarter stood at 2.80% as against 2.69% for Q3 of FY26 and 2.85 for Q4 FY25 and for the full year it stood at 2.68% as against 2.73% which was well within the guidance given at the beginning of the year. PBT profit before tax for the quarter stood at 1934.24 crores as against 1769.58 crores. A growth of 9.31%. Profit after tax for the quarter stood at 1497.41 crores as against 1367.96 crores for the same period previous year up by 9.46 and path for FY 2526 to that 5595.15 crores as against 5429.02 crores.
For FY2425 showing a growth of 3%, dividend was declared by the board at 500 rupees, I.e. 10 rupees per share. In terms of asset quality, the stage 3 exposure default stood at 2.16% as against 2.47% as on 31 3.25 and 2.45% as on 311225 reflecting a sequential as well as year on year improvement in the sale. Total provisions as on 31st March 26th is 4569 crores with stage 3 provisioning at cover at 50.08%. The credit cost for Q4 of FY26 is 2 basis points and the full year it is 18 basis points. The company also conducted sale of a stress asset through ARC for a cash consideration of 70 crores during Q4 of financial year 26.
On the funding side, the cumulative cost of Funds stood at 7.27% as on 31st 31st March 26th as against 7.73% as on 31st March 25th showing a decline of 46 basis points on year on year basis. Incremental cost of funds also reduced significantly from 7.73 in financial year 25 to 6.94 in financial year 26, a decline of 79 basis points and Q4 of FY26 it stood at 6.86 as compared to 7.66% for Q4 FY25. During March 26 the interest rates were elevated due to the war in West Asia which resulted in a shoot up of crude oil prices and the fall of the INR at record levels.
However, we managed to reduce our interest expenses by more than 150 crores compared to Q3 of FY26. We also got repriced some of our outstanding bank borrowing during the last financial year. In the last financial year 2526 we raised fresh loans from banks and financial institutions amounting to more than 45,000 crores and raised more than 10,000 crores for NHB at very competitive rates. Out of the total incremental borrowings of financial year 2526 around 82% were at floating rates. The total outstanding borrowings share of the floating rate borrowings today stands at 52% as on 31st 326 as compared to 45% as on 31325.
On the technology initiative, the company has launched a project in February 26th which we call the straight through process. This is basically a machine enabled credit approval process enabling automated underwriting of loans. This initiative is expected to significantly reduce manual intervention in the sanction process and enhance overall customer experience through much reduced turnaround times. With this brief introduction, I would like to invite you for your queries. Thank you.
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star then one on the deadstone 24. If you wish to remove yourself from the question queue you may press Star and two participants. You are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue send it a reminder to all. You may press star N1 to ask a question. We will take the first question from the line of Maru from Tara Capital.
Please go ahead.
Unidentified Speaker
Yeah, hello sir. So can you talk about your growth outlook in terms of what disbursement growth in individual home loans you expect next year and even your margin outlook. Your margins did expand in 4Q but from year on and then your stage 3 CL has gone down. So if you could comment on what level you would like to keep it at.
Questions and Answers:
Tribhuwan Adhikari
Okay, thank you. Thank you Maru for your question. We are coming to the first thing regarding the growth estimates. Well honestly Maruk, right at the moment we are sitting in a very volatile geopolitical situation, right? West Asia crisis going on. Nothing seems to be moving as such. Of course a lot of initiatives, ceasefire and all that have been taken. On top of that India itself is being impacted. The energy crisis as we may call it. The sort of pressure, inflationary pressure on all the other things.
So honestly, growth would depend on the geopolitical situation and the economic situation. Yes, growth in last year has been muted. 4.4% was the growth for the full financial year largely contributed by intense pressure in the housing finance industry. As you are aware, LAC housing finance. Basically we are into the individual home loan segment where we are competing with banks and with the repo rate cut of 100 basis points by RPI RBI the bank’s repo rate was immediately reset because their rates are linked to the repo.
We had to frantically take a call on reducing our rates. Also that did impact of course there was a time lag, a delay in US reducing rates. So there was. The impact was felt in the business inflow into the company. So it was a very competitive year last year which. And the competition did impact the. I would say the growth which we received 4.4% as against a double digit growth which we were alluding to in the beginning of the year. But yes, that is the way it is going to be. And in the beginning of last year I clearly said that given a choice between protecting margins and going for growth, I would prefer to protect my margins than really go helter skelter for growth.
So that is, we have been able to protect our margins going forward. Honestly speaking, yes, what we are right at the moment, difficult to hazard. A guess what the situation is going to play out throughout the year. Q1 definitely we are targeting a 15% growth for Q1 going forward. Definitely. If the conditions are what they are. A 10% to 12% growth is what I am expecting this year and I’m pretty sure we’ll get there this year. On the margins front, 2.80 was the NIM for the quarter 2.68 was the NIM for the entire financial year.
Well within the guidance of 2.6 to 2.08 which we had given in the beginning of the year. February and March were reasonable months. February, I would say January and February were good months for us where we were able to borrow at very competitive rates of almost 6.8%. But thereafter, February and March, especially March, with the West Asia crisis evolving and growing, there was a pressure on the borrowing cost. The costs are still, I feel, elevated, but I think in Q1 we would be able to. We will be able to maintain a margin of 2.6 to 2.7 for the year.
Difficult to predict right now, but assuming that things remain normal, I would say for the year margin growth sort of NIM of 2.5 to 2.7 is what we are aiming to achieve. On the ECL front, yes. On the asset quality front, asset quality has been improving quarter on quarter. Our GNP ratio has come down from 2.47 at the end of last year to 2.15 at the end of FY5.26 and NPA is down from 1.22 to 1.08. The provisioning requirements are reducing. As regards settlement, no major big settlement was witnessed except for this one settlement of 70 crores which we could do in the month of March.
So the big ticket settlements are still in various stages of negotiation. Expecting. Yes, advance information. There is one big account which has been resolved. But as per the guidelines of RBI we have to wait for one full year before the let us call it the resolution of the settlement can take effect in our books. That settlement happened in the month of May of last year. So this year in the month of May, current year, the effect of that settlement will be felt in our books. So asset quality is definitely going to improve much, much further in the coming financial year.
Better than what we witnessed last year.
Unidentified Speaker
Okay, so. And I just have one question. So may I please ask if your successor has been identified.
Tribhuwan Adhikari
Yes, my successor has been identified. In fact very unfortunate incident took place. The successor who was identified earlier and he passed away on the 9th of.
Unidentified Speaker
Yes sir,
Tribhuwan Adhikari
9th of May. Mr. Sanjay Dayal was the
Unidentified Speaker
Appointed
Tribhuwan Adhikari
EO and designated to take over from me on the 9th of May and passed away. Now we have another Successor in place, Mr. Sandeep Kumar. He has joined us just yesterday and he will be taking over from me on 31st of August 2026.
Unidentified Speaker
Okay sir, thank you so much. Thanks a lot.
Operator
Thank you. We will take the next question from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah, thanks for taking the question. So firstly when we look at it in terms of the overall repayment and prepayment rate during the quarter it’s been slightly higher outside of the HL loans, particularly on the left side. So if you can just highlight in terms of how the trends have been in BT out, how has been the repayment rates in the home loan and why the prepayment or runoff rates were quite high in Q4 despite I would believe like there would have been some improvement on BT outload during the quarter as you indicated last quarter.
Yeah.
Tribhuwan Adhikari
Well. Kunal. Yeah. Good morning. If I talk about the prepayment. Yeah. Prepayment is a natural phenomena in the housing finance industry. Right along with every emi some amount of principal does come in and then people having extra cash or extra money to spare, they do try to pair off their outstanding loans. So if I talk about the last quarter, the prepayment has basically been on an average in the company. The prepayment is about what 2000 odd crores every month. Right.
Lokesh Mundhra
Supplement for the last quarter the net net BT was around around,250. Only prepayment by way of lump sum payment by the customer. It is not the phenomenon of the Industry so important is what BT or InjectVR pays. So that is not in an alarming situation. That was quite normal during this quarter.
Kunal Shah
So this compared with Q3? Yeah, 1150. If I have to compare it with Q3, how much was that net BT? If
Tribhuwan Adhikari
I compare BT of Q3 in Q3 BT 8916 loans went out of our books amounting to 2157.29 crores. Right. And in Q4 this figure came down to 6480 and 1187.71 crores. So approximately near about 1000 crore reduction in BTout. In Q4 it is not that BTout has increased. In Q2 and Q3 the BTout was significantly higher. Q2 it was 2838 crores. Q3 it was 2157, Q1 was 1341 and Q4 was 1187. So BT is more or less settled by at about what approximately if I round it up to about 1200 crores in a quarter.
Lokesh Mundhra
And you know Kunal, for repricing or repricing of our this inspections we have issued somewhere in last week of October. So after October BP out is checked. Checked to a great extent.
Kunal Shah
Yeah. So
Lokesh Mundhra
In the last Q4 it is not so much material.
Kunal Shah
Got it. So when we. When we are looking at say 10 12% disbursement growth for the full year. So in fact you are suggesting closer to almost like say 73 to 75 or thousand crores of disbursements for next year. And looking at the current run rate, in fact still the loan growth would appear to be in a mid single digit or so. Maybe earlier you have been guiding for taking it towards 8 to 10 odd percent. But is there any possibility, would there be any levers, are there any initiatives which you are taking in order to pull that up or we should see nearly like a mid single digit growth continuing for a while given this geopolitical situation.
Tribhuwan Adhikari
Yeah, Kunal, if I talk about the book growth and the disbursement growth, disbursement growth was impacted in Q1, Q2 and Q3 of last year. Right. If you look at Q4 our disbursement growth is 10%. So this was where we wanted to be for the full financial year. But somehow it happened in Q4 only. And this has continued in the April of Q1 of this year. In April I have a disbursement growth of almost 20.87%. So the growth is picking up. Yes. As regarding the levers. Yes, we have looked at what we really need to do to really achieve this so called elusive double digit growth which we have been alluding to in the past two, three years.
Two, three things we have identified this year which is going to be totally different from what we have been doing in the previous years. Number one is all this while 36, 37 years of our history we have always been focused on sourcing housing loan assets or rather the organic method of doing business. Right. For the first time since last quarter of last, we spent the last quarter of last year in formulating a co lending and a DA policy, direct assignment policy which is now ready. So this year we are going into going for co lending more so in the retail segment and partially in the partially and cautiously in the project finance segment.
So this is one initiative or one step which I think would help us grow our business as well as our book. Number one. Number two is what we are looking at. Traditionally we have been sourcing business through our agents, right? 90% of my business comes in through them. We apart from them we have just two corporate agents. One is our own subsidiary LIC Financial Services Limited which approximately does about 10% of the total business of the company and the other is an individual entity or a company called SP Enterprises.
This year, this year what we are looking at there are a lot of business aggregators available in the market. People like Andromeda and others. We are consciously going to engage with them and try to engage them to source business for us. That would probably give us some volume of business. Four thousand, five thousand crores is what I am looking for in the first year. That is one. And number three is we have been focused, we have been trying to do affordable business but it has not taken off in any big way.
Yes, we were cautious about it. Consciously we were going slow because we were aware of the high risk in this segment. And the other thing was that since in the last 36, 37 years we have never done affordable, the true meaning of affordable. We have mostly been comfortable doing IHL individual home loans to the salaried and the self employed class. So this year a decision has been taken that we need to set up a separate affordable vertical and something like what PNB has done, the Roshni vertical of pnb, we’ll be setting up a similar vertical.
The process will start very shortly. It will be completely new and totally people will be onboarded from outside because I believe people in our company, we are not retired so we’ll be hiring people from outside. It will be a complete separate Vertical wherein the entire sourcing, the entire credit appraisal, the entire recovery, the entire collection machinery will be handled by people who are attuned with, who are experienced in doing affordable business. So that is another and the fourth is we are increasing our feet on the street or resources.
In the marketing side. We have achieved, we have received an approval of onboarding about 200 people for the marketing vertical. The process will be completed by the end of Q1. These 200 people are about what 6%, 7% of my, the total employees. I have a total employee strength of 2500. So this 200 will be about 7, 8% of the total employee strength. So this also will add to my feet on the street and actually my business push which I intend to have. So these four, five things which I talked about should give me at least a double digit growth in the current financial year.
Kunal Shah
So this is on disbursements.
Tribhuwan Adhikari
This is on disbursement. Yes. Yeah. On the book growth side. The book growth side. Yes. One area we are looking at, our one area we had not been very focused on was on the BT out, right. People moving out. Last year BT out for the company as a whole was about what 12,200, 12,778 crores. So that’s approximately a rundown of almost 1,000 crores per month. This is one area which we need to focus. We have set up a separate, I would say department which we are calling business retention department. This year people have been put in, put in place and they will be completely focused on the BT out.
Any case going out. We’ll have to go through this particular the people in this department and we will try whatever is possible on our part including compromising on the rates we offer to hold back business or retain the business which we have because retaining business is always profitable. Because people going out are not only a drain on the income of the company but also sourcing new people is slightly more costlier proposition as compared to retaining existing customers.
Lokesh Mundhra
And Kunar net business transfer is around 7,000 crore. Only looking to the size of the company the portfolio is more than 3 lakh 20,000 crore net BT out of 7,000. Around 7,000 is very normal I think looking to the industry practices.
Kunal Shah
Got it, Got it. Yeah. Thank you. Thanks a lot. And patiently answering all the questions. Thank you.
Operator
Thank you. We will take the next question from the line of Sanket Cheda from DAM Capital. Please go ahead.
Sanket Chheda
Yeah, hi sir, just wanted to check the 10 to 12% guidance that you gave is on a loan growth right,
Tribhuwan Adhikari
Yeah. 10 to 12% is on the book.
Sanket Chheda
On the book. Okay.
Tribhuwan Adhikari
Yeah. Like, like about 73,000 crores disbursement is what we are targeting in retail. 4,500 crores disbursement is what we are targeting. That is the budgeted disbursement which the board has given us 73,000 crores in the 4,500 crores in construction finance or the wholesale book. So total taken together is about what? 70. Near about 78,000 crores. That is what the budget of the company is this year. So if we get that, if we get that, that will give us about a 15% business growth and that should definitely translate with all the steps we are taking including retention of portfolio department which we opened.
We expect that the BT out thousand crores per month should come down significantly and that should give me a loan book growth of double DS. 10 to 12% what I’m talking about.
Sanket Chheda
Yeah. So since we are out of the rate cut cycle, you expect the BTR to come down and hence the guidance of 1012, is it fair to say? Right.
Tribhuwan Adhikari
No. Can you, can you come again, Sanket?
Sanket Chheda
No, since, since we are now at the back end or out of the rate cut cycle, wherein usually during the rate cut cycle we face lot of BT out and now you expect that to come down. The pressure of BTI outs, is that the right assumption for next year?
Tribhuwan Adhikari
Yeah. At the moment I think the rates are more or less fixed. I think there’s not going to be. I’m pretty sure there is not going to be any more rate cut in the prevailing circumstances. I don’t think RBI has any leeway to that. On the contrary, there is a possibility if things go. If the situation turns from bad to worse and this West Asia crisis prolongs for another two to three months. You may. I see, I see. There could be a possibility of a rate hike. Right. So again this rate war, you see the problem with us now we are competing with banks.
My IHL portfolio is 82%. We have brought it down from 85 to 82 at the end of this year. We are trying diversification into the lab and LRD segment. But yes, we are still 82% IHL and IHL also, it is a prime segment, basically Cibilsco 750 and above. So that is exactly the, I would say the domain, the territory of banks. So competing with them on the rate front is proving to be very, very difficult on our part. Banks have an
Sanket Chheda
Inherent
Tribhuwan Adhikari
Advantage of cost of funds. Their cost of funds are slightly Lower and likely slightly. Thing is that we borrow from banks, right? So basically we are competing with our lenders, which is a difficult proposition. So hopefully, yes, hopefully, I think the rates are settled and going forward let us see what the RBI does and we will have to match. See, the problem is our banks are totally repo rate linked, right? So there is an advantage for us in increasing rate cycle. The moment repo rate goes up, bank rates will immediately go up.
We do have some opportunity, probably one month and a half time frame where we can sit back and probably not immediately hike the rates and probably go in for a rate hike at a slightly later stage which can give us this one month, one and a half month advantage over the banks. So let us see how it plays out and we’ll be waiting for an opportunity and try to cash in on that.
Lokesh Mundhra
Sankesh, I want to add one more thing. The BT out for the month of is negligible. BT out, BT out, net BT out. So BT out was 1100 somewhere at the retail segment and the BT in was 1011. So net BT was hardly 100 crores. So looking at the size of this company, 100 crores BT out, net VT out is insignificant for the company.
Sanket Chheda
This was April.
Tribhuwan Adhikari
Yeah. Sanket. Yeah. What? Voice is not very clear.
Sanket Chheda
Yeah. Did you say something? I was saying, relatively right, that banks will always be more competitive on cost of funds. But. But within our peers or the NBSP set of companies, since we have a higher share of same capital market borrowings, our cost of fund inch up will be relatively slower. Right? In a rising interest rate scenario.
Tribhuwan Adhikari
Yes, yes, yes. Our cost of funds is definitely much, much less than that of NBFCs. We are AAA rated, which is the highest rating you can get in the industry. Right. So our cost on fund borrowing cost for the year was 7.27 cumulative and 6.94 incremental. This is the overall rate at which we borrowed in the last financial year, we expect. Yes. As far as the thing is concerned, we will definitely be getting lower rates as compared to NBFCs and other HFCs. So we’ll try to take it at an advantage. But again the problem, as I said now we are competing with banks.
So even a borrowing cost of incremental borrowing cost of 6.94 as compared to the borrowing cost of a bank, including casa,
Unidentified Participant
Which
Tribhuwan Adhikari
Probably would be five and a half five and it is still on the higher side. So we have a little bit of more tightrope working to do as compared to banks. But yes, we have to Be competitive, as I said, because it’s because of the line of business, the segment in which we operate ihl, we have to be competitive. We have to compete with banks and we’ll do that.
Lokesh Mundhra
This year. Our maximum borrowing is from banks and
Tribhuwan Adhikari
At
Lokesh Mundhra
Floating rates only, it’s almost 82%. We have borrowed at floating rates, especially from banks. There is a, there is a reduction, substantial reduction in rate of interest on incremental basis year. Banks, moreover, at 7.85% this year is 6.90% only.
Sanket Chheda
So
Lokesh Mundhra
Lot of cost benefit we got in the current year.
Sanket Chheda
Correct. You know what I was alluding to is since we have lot of NCDs, NCDs typically have a three or five year maturity. So in that context also as rate, even if the rate increases, our rate increase will be relatively slower. The last question I wanted to have is if you can tell us something about the April disbursements in terms of how it is versus last April, any sense. If you can give
Tribhuwan Adhikari
No disbursements in terms of what Sankeshwar,
Sanket Chheda
April disbursements in the month of April, how they have paired with last year, like quarter, you were saying 15%, but April to April the disbursement growth would be what
Tribhuwan Adhikari
I told you, April to April, my disbursement growth is 20.87%.
Sanket Chheda
Oh, okay. Okay, okay. So those were my questions.
Tribhuwan Adhikari
Thank you. Thank you. Thank you.
Operator
Thank you. We will take the next question from the line of Abhijit Tibriwal from Motilal Oswal Financial Services. Please go ahead.
Unidentified Participant
Yeah,
Operator
Please use your handset mode.
Unidentified Participant
Yeah. Is this better now?
Operator
Yeah. Better.
Unidentified Participant
Yeah. Good afternoon, sir. Thanks for taking my question. So two things. One is during your opening remarks, you have shared that domestic mortgage demand has remained reasonably resilient. And then you also shared that almost 20, 21% kind of a growth in disbursements that we see in April this year. Just trying to understand, I mean, out of few real estate companies, developers who’ve reported, we have started seeing some acknowledgment that footfalls have moderated a little bit. Conversions are now taking longer, customers are taking longer to make a purchase decision.
So just trying to understand, have you started seeing any of that in April and May? Because your growth in April tells a very different story. So just trying to understand, I mean, what is your view on this?
Tribhuwan Adhikari
Yeah, Abhijit. Yes. Last quarter also we grew by 10% which was significantly higher than the growth in Q1, Q2, Q3. And carrying it forward in April, we have shown a growth of almost 21% right now. The impact of either the West Asia crisis or the, I would say slightly reduced outlook for the economy has not yet played out in us. And I think typically the reason is because of the segment we operate in, right? We are mostly into IHL salary class mostly. And number two, we are basically, our ticket size is on about 32 lakhs of rupees per loan.
So basically we are operating in the middle class segment. So right now in this segment, not seeing too much of an impact. But if this crisis continues, the energy crisis continues, inflation goes up, definitely there will be an impact. The other part of it is, which has me worried also to some extent is the impact of AI, right? In India we’ve been hearing a lot about AI and especially in the Western world right now. The impact, yes, there have been layoffs in India, but not to that extent. Going forward, we’ll have to be very, very cautious and I would say on our feet and toes in assessing the impact on AI, because some of the large centers where I do business, Lichfield does business, are basically centers which revolve around the IT industry.
Centers like Bangalore, centers like Chennai, centers like Hyderabad, Gurgaon, Pune. So these are centers where a big chunk of my business comes in from. And these are centers which are totally, I would say revolved around or evolved around the IT industry. So if AI, the impact of AI does impact these centers, it is definitely going to impact my business also. So that is the worry for me. Yes, West Asia crisis is a worry because basically if you look at the housing thing, especially the segment, ideally in the middle class segment, it is all sentiment based, right?
If I go to buy a house, being a middle class man, I would first need to be very sure about my future, my future earnings, my capacity to repay. So if there is any doubt, any hesitancy, I would defer the decision to purchase a house or take a loan, etc. Etc. So that could play out, that could be maybe what is playing out in when the developers are saying that we are witnessing slightly lesser footfalls or lesser interest. And the other part of it is most of the developers, at least the big developers, if you see they are into the semi plus semi luxury and the luxury segment of the market.
This is an area where we don’t operate in. And so there also the sentiment plays a big hand. If a person or a businessman or anybody with money sees that my future income is protected, he is definitely going to go for a 3 crore, 5 crore, 10 crore or even a hundred crore camellia so that could probably be the reasons right now. Touchwood, we have not been able, we have not said, felt the impact as such going forward. Keeping our fingers crossed, hopefully nothing happens.
Unidentified Participant
Got it sir, that’s useful. So the other question I had is I am hoping you’ve not made any PLR changes in this quarter which is yet to reflect in the reported years, right?
Tribhuwan Adhikari
No, no, we have not made any PLR changes as yet. But yes, considering our cost of borrowing which has increased in the months of March and April also probably in the month of June, we will have to take a call on what we need to do. Definitely at these levels of borrowing costs will be difficult to maintain the PLR at the rate at which we are maintaining.
Unidentified Participant
Got it. But just on that, I mean from what I understand mostly in the HFC space, we are price takers in the mortgage segment from banks. So unless there is a repo rate increase, do you think a PLR increase can be pushed through to customers?
Tribhuwan Adhikari
If you’re analyzing the banks, the quarterly results of banks, the NIMS of all banks are under pressure, right? Liquidity situation tightening. Although right now I have said that it is more or less adequate. But I think in the coming times, unless RBI intervenes in a big way, the liquidity situation is going to be tighter. So again I think banks also need to take a call as what they need to do with their nims. And similarly if they increase then being in a competitive segment, yes as I said we have a leeway of probably a month, a month and a half.
But within a month, a month and a half we’ll also have to increase if you want to protect our margins.
Unidentified Participant
Thank you.
Lokesh Mundhra
Cumulative cost as on 31st March it was 7.27 but as of now there is no, not a, not an increase in that cumulative cost. Otherwise there is a dip of at least two bits in that cumulative cost of borrowing. As of now I don’t think there is any need of increasing PLR or any rates. Let’s see first quarter then definitely we will review it and then accordingly take a call.
Unidentified Participant
Got it sir. Got it. And then the last question that I had is, I mean have you taken any technical write off? So sorry to interrupt. In
Operator
Between Abhijit, I would request you to kindly rejoin the queue again. Thank you. Before we take the next question, ladies and gentlemen, in order to ensure other management will be able to address all the questions from the participants in the question queue, we request you to kindly limit your questions to two per participant. If you have a follow up Question please rejoin the queue again, we will take the next question from the line of Ranesh from icic. Please go ahead.
Unidentified Participant
Yeah, yeah. Hi sir. So my first question is on the nim. Right. So when you look at the spreads, actually it fell sequentially and largely due to, you know, continuous fade in contraction. So just wanted to understand how do you see asset yields, you know, moving going ahead also considering, you know, we want to restrict BT out and also at the same time we are thinking to modify Paylor, you know, in next couple of months. So yeah, anything on the upside till what do you see, let’s say near term.
Tribhuwan Adhikari
Yeah, around talking of spreads, we ended the year with a spread of 1.94 and when compared to last year the spread was 2.06. So yes, definitely there was a 12 basis point compression in the spreads. But this was expected. We were expecting this because of our competition with banks, the low lending rates, the btouts, the rewriting. And rewriting happens when customer applies for rewriting at a lower rate as compared to his existing rate. So rewriting, almost 40,000 crores of business got rewritten where the rates got reset.
We had to reduce our rewriting rates also to keep them in line with, in line with the market. Yeah, so. So it’s going to be, it’s going to be a challenge maintaining NIMs, I’m telling you. Yeah. But what we are trying to do cautiously, for the past two years we’ve been trying to diversify our business from the predominantly IHL segment into the LAP and the lrd. And I would say I am reasonably satisfied. In two years we’ve been able to increase the proportion of our LAP and LRD business to around about 15%.
Last year it was at about 12%. So this year there’s a 3% increase. Yes. Nothing great if you talk about the percentage increase, but definitely a directional. And if you realize, if you understand right, see changing, you can change products, you can change everything. But changing culture is very, very difficult. So a predominantly IHL dominated culture and moving it to LAP and LRD is going to take some time. It’s going to take some time, but we are definitely there. We would ideally like to have at least 25% of our business in the coming two years from LAP and LRD which are marginal creative segments.
So that is the way forward. And the other thing, the affordable. Of course it will take time because we are setting up the vertical this year. I expect another two to three years where we can get into the affordable. And the third part is the construction Finance. Right. Last year was not a very good year for us. There was a negative growth in the wholesale book largely because of our restriction imposed by the board on processing wholesale loans where the developers are late rated triple B and above.
Right. So that we have addressed. We have now come out with our own credit rating model wherein this triple B will be removed. And I think in the next month onwards I think we should have a fairly level playing field for construction finance also. That will give us some. Because construction finance are. Lending rates are slightly higher in construction finance. I think it’s more about 11. Near about 11%. Right. So that should help me protect my margins.
Unidentified Participant
Got it. So but if I recollect the LRD and IHL yields will be very similar, right?
Tribhuwan Adhikari
No. LRD is slightly higher than IHL. We do not. If my IHL starts at 7.15 of course that is for the top bracket, top notch, 800 plus civil. My LRD would be starting at some around 9.25. Right. So there is a big. Would be
Unidentified Participant
What closer to 10
Tribhuwan Adhikari
Starts at 9.25. Average I would say would be around about 9.75 on an average. I think LRD would be at 9.75. Life
Unidentified Participant
And lap.
Tribhuwan Adhikari
Lap would be at 9. Average would be about 9.3, 9.4 lower than LRD.
Unidentified Participant
Oh, lap is lower than LRD.
Tribhuwan Adhikari
Yeah.
Unidentified Participant
Okay. Okay. How
Tribhuwan Adhikari
It is this company? Yeah,
Unidentified Participant
Got it. And just lastly on this affordable piece, is there any target in our mind that you know, let us say by 28, we want to scale this book to this level or something?
Tribhuwan Adhikari
No, right now, no target. Right now we are planning for the baby to be born. Whether he becomes an IS officer or a pilot or an astronaut. We’ll see after he’s
Unidentified Participant
Okay. Thank you. Best of luck.
Tribhuwan Adhikari
Thank
Unidentified Participant
You.
Operator
Thank you. We will take the next question from the line of Subranshu Mishra from Philip Capital. Please go ahead.
Unidentified Participant
Hi sir. Good afternoon. So this growths that we are targeting of 10 to 12%. How do we decompose that? Segment wise. And how much are we expecting for individual home loans? How much for lap? How much for construction finance? Also if you can give me segment wise yield on books and segment wise GS3 numbers. Thanks.
Tribhuwan Adhikari
Segment wise yield on books and
Unidentified Participant
Straight three numbers for segment wise.
Tribhuwan Adhikari
Yeah. Talking about this 10 to 12% growth in the book. As I said. Yes. Retail. Retail we will be targeting about. Near about I think 15%. Right. That is what the budget is for the budget of 73,000 crores. Last year we had done 66,000 crores. So the budget is around about 15%. For retail project finance we have reduced our budget from 10,000 crores because last year we just hit about 2,000 odd crores. We have reduced it from 10,000 crores to 4,500 crores. But honestly my heart says that we should be able to do more.
Because now as I said we have come out with a new credit rating model which does not put this obstacle or limitation of BBB rated companies. So I should be able to get a fairly wider pool to source my business from. Though we have set it at 4,500, I expect at least 6,000 to 7,000 crores from my project team to come put together. LRD last year we have witnessed a growth of LRD and LAB. We have witnessed a 25% growth that is not contributing to too much of thing of my book right now. But LRD and LAB, I would expect this 25% growth rate to continue.
In fact I would expect it to accelerate because slowly, slowly as we’ve been doing it for the past two years there has been a visible momentum shift, change in the mindset, change in the culture, confidence level of people in writing this. LRD and LAP loans has increased. So approximately about a 25% growth in LRD and LAB this year. Continuation from where we left last year. 10 to 10% growth in retail. No. 15% growth in retail and approximately at least more than 100% growth in project. Because 2000 crore what we did last year, 4500 is the minimum target which we have to achieve this year.
Lokesh Mundhra
Subhanshu, just I want to add. You wanted to know the segment wise yield. So just in the cumulative yield on the IHL is around 9.03% for the cumulative yield and for non housing individuals it is 10.05% and for others corporate loans and project loans it is 10.56% on cumulative basis and in totality it is 9.21%. Our cumulative for the AS on 31st March 26th
Unidentified Participant
And
Lokesh Mundhra
What rate
Unidentified Participant
Segment wise?
Lokesh Mundhra
Yeah. IHL is 9.03% cumulative yield as on 31st March 46.
Tribhuwan Adhikari
Stage three.
Unidentified Participant
Yes sir. Yes. Draw. Stage three segment wise.
Tribhuwan Adhikari
Stage three Segment wise.
Lokesh Mundhra
You mean phase three Stage three nt. Yes sir.
Unidentified Participant
Yes sir. Yes sir.
Lokesh Mundhra
Just a student segment wise. So stage three. For individual, for individual loan it is 1.03% only is 3 individual individual notes and for NST and for this it is 20% 20% plus 21.02% or NHI 20.5
Unidentified Participant
Right, right. Yeah. And if I can just squeeze in one last. Yes, sir. 3.02%.
Lokesh Mundhra
3.51. NHI is it 3.51% individual.
Tribhuwan Adhikari
This is basically your lap. And LRD, this is 3.5. And
Lokesh Mundhra
In totality stage three is 2.15%.
Unidentified Participant
Understood, sir. And if I can just clean. One last question, sir. So LIC holds a large stake in IDBI bank and of course it owns us as well. Is there any discussion at the board level of a merger? Then we get that cost of fund advantage as well. Right. So we don’t have to compete with the bank anymore. So. No, no, no.
Tribhuwan Adhikari
That has. I think your EPAM has already run with no merger of adfc. No, sorry. IDBI with lic. They’re not allowing that though. I.
Unidentified Participant
This will. This will, you know, reduce our pressure of funds.
Tribhuwan Adhikari
If you have some lobbying skills, you can lobby with RBI and tell them to permit. Regulator has to permit.
Lokesh Mundhra
Because
Tribhuwan Adhikari
The regulator has to.
Lokesh Mundhra
The regulator is
Tribhuwan Adhikari
Not permitting neither RBI nor ird.
Unidentified Participant
This is very helpful, sir. Thank you so much.
Operator
Thank you. Before we take the next question, a reminder to all the participants. Kindly restrict your question to one per participant. We have the next question from the line of Gaurav Khadil Wal from JP Morgan. Please go ahead.
Unidentified Participant
Hi, good morning. Thanks for taking my questions. I actually got two questions. One on the corporate NPA resolution. How much is the amount pending? What is the size of the resolution that you expect to book in May? And any more clarity on when can we expect rest of the resolutions to take place, Sir?
Tribhuwan Adhikari
Well, if you look at the corporate npa, our stage three. Just a minute. Where is this figure. Now? That is 20.91% volume, volume,
Lokesh Mundhra
Volume
Tribhuwan Adhikari
Of total NPA.
Lokesh Mundhra
That corporate and projects. Our NPA exposure under stage three is two eight three seven crores.
Unidentified Participant
Okay. And any timeline
Tribhuwan Adhikari
Now corporate NPS. Gaurav, as I’ve been saying, corporate NPAs, these are a difficult piece to resolve because most of these are companies and they are their own legal teams. They are very adept in putting a spanner in the works. Yeah, but then a lot of work has gone in last year. Especially the big NPAs in the corporate sector which we have and we did resolve 170 crores through arc sale March of last year. There are others lined up and I believe Touchwood Q1 of the current financial year should be good.
Another piece of news in advance is that we have gone in for a resolution in one of the big corporate NPAs where the resolution has been finalized in May of 2025 as per RBI directives and guidelines, the effect of that resolution can only be taken after a curing period of one year. So May 2026 is when that resolution, the effect of that resolution goes into my books. So that would reduce my NPA as well as reduce my provisioning significantly. I cannot give you the exact figures right now, but overall I think corporate are well on their way.
Just keeping our fingers crossed. Lots of cases in the DRTs and the NCLTs which usually takes time as you know. But again many of the people whom we have taken to NCLT and DRT are wanting to settle. Of course the moment we get a proper settlement price, which is I would say acceptable to both, then the resolution does happen. And on top of that arcs. Yes we are pursuing arcs. There have been just two ARC sales so far, but we are trying to rework our ARC policy, try to be slightly more accommodative when possible and try to offload bigger chunks of our retail NPA, especially in the retail segment and specified NPAs or difficult NPAs in the corporate segment.
So I’ll put together all these three efforts would result in a significant improvement in my asset quality provisioning requirements and the overall improvement in the asset quality. Got it.
Unidentified Participant
Thanks for that, that’s very helpful. But if I just look at the bigger, the larger picture, how you internally thinking about the ROA in FY27 so we ended the year at 1.78 in FY26. From your comments, margins, likely NIM is going to go down. You’re going to do more of third party distribution so that’s an addition on the cost. DFA loans would cost anywhere between 50 to 100 basis points on disbursements as a percentage of the disbursement amount. Credit costs at best stays flat in FY27 or potentially moves up.
In that context, how shall we think about ROA for FY27?
Tribhuwan Adhikari
No credit cost. See as far as NIMs are concerned, yes we have given you a slightly lower guidance but we would be looking at maintaining the NIMS at this level because again you have to see yes cost of borrowing is up but then as I said, we’ll have to take a call on the cost of lending also and that should happen quickly. Number one. Number two ROA 1.78 for the year, right this year what guidance should I give you? 1.75 to 1.800 in the ROA under the existing circumstances if things improve or think better, we’ll be looking the target given by the board is two.
Target given by the board is two. Right.
Unidentified Participant
Got it, sir. Okay. And any plans on increasing dividends?
Tribhuwan Adhikari
Well, dividends we maintained it last year. We had increased it from. From 450 to 500. Right. 10 rupees per share.
Unidentified Participant
Yeah. But going forward, any, any discussions at the board level? Because if ROA. Well, if ROA, let’s say is a flat pin FY27 ROEs have been declining. So has there been any discussion on whether you want to increase payout to hit that 15, 16% ROE mark?
Tribhuwan Adhikari
Well, yes, there was a. There was a discussion in the board yesterday on this. Yes. Certain board members were of the opinion that we should increase dividend payout and other opinion board members were of the opinion that maybe we could find other ways of, let me say, rewarding investors. But nothing, no decision has been taken. But let’s see going forward how it goes. How it goes. Because this is a call to be taken by the collective board altogether.
Unidentified Participant
Perfect. Thank you so much.
Operator
Thank you. We will take the next question from the line of Rakesh Kumar from Valenti’s advisors. Please go ahead.
Unidentified Participant
Hello. Hello. Yes,
Operator
You are audible. Please proceed.
Unidentified Participant
Yeah, yeah, thank you. So firstly the question with respect to affordable housing. So what is the credit composition that we are looking at? Like so like you referred the name of PNB Housing. Like where we have seen composition rising from 2.7 to 9.4 from year 24 to year 26, March. So how do we see affordable housing mix changing or like, you know, increasing? Because it is not there right now. So how to look like maybe one year down the line?
Tribhuwan Adhikari
Rakesh, honestly speaking, see, the baby has not yet been born. We are first looking getting the baby born and then seeing whether it is healthy or not, how it shapes up. So honestly speaking, right now we have no targets in mind for the first year. Yes, eventually we do realize this is a segment as a company we have to be in. We also realize that this is a segment which is completely new to us. And so we are cautious that we should not jump into it headfirst and burn our fingers or burn our heads, if I may say so.
So we will be taking a thing. We’ll be setting up the vertical. And I said this vertical has to be be run by people who are experts or who have experience in running or working in the affordable segment vertical. Right, Affordable segment. So honestly speaking, yes, on the long run, in the long run we would expect this segment to contribute significantly to the business of the company. But right now we have no targets we have not set any targets.
Unidentified Participant
Got it. Just one small question. Like you know, if we look at in the declining interest like you know, phase we have seen like our funding cost, you know, going down by 46bps and credit yield going on by around 58 bits. So assuming like you know, from the next year onwards, if we see rising interest rate scenario, so would we see the reverse like and to what extent possibly
Tribhuwan Adhikari
Looking into the very competitive scenario which we are in, right, competing with banks. So I do not see a major reversal happening with the interest rates going up because yes, interest rates going up. It does give the housing finance companies the benefit of slightly higher rates or higher spreads or higher margins. But then again, if you have to compete with your competitors, you cannot do things which are completely different from what they are doing until and unless you are going to, you are able to enter into segments into which your competitors are not very comfortable with or not very, I would say focused on.
So that is precisely what we are trying to address it from the two front. Number one, knowing very well that IHL is our forte, we are not going to, I would say dissuade people from doing ihl. Rather we would say we would try to encourage people to get into LAP and LRD. More we have done that. The different the rate of commission we are paying on lap and Elradi is slightly higher differential as compared to ihm. And there has been a visible shift, as I said, about 15% business coming in from there as compared to 12% of last year, 3% increase in one year going forward.
As this momentum picks on, people become more comfortable with selling LAP and lrd. I expect this percentage share to increase further. So these are margin accretive, right, as compared to ihl. Because IHL is something which is giving me the lowest margins and lowest spreads. So these are margin creative. So that is the segment we are trying to focus on but cannot happen overnight. A company for 36 years doing IHL, we cannot suddenly expect them to suddenly shift to whole hog to LAP and lrd. It’s going to be gradual, but definitely directionally we are there.
We would like to increase the pace, of course, so that will probably give me a slightly better spread and maybe they help me to maintain my margins which I have declared this year. My name’s
Lokesh Mundhra
Rakesh. I want to add one more thing. You know our spread is 1.94%. If you see the industry average, it is on a better side. So if we are able to maintain this similar spread then I think definitely our margins are then would be better in the current coming year.
Operator
Thank you very much, ladies and gentlemen. We will take that as a last question. And with that concludes the question and answer session. I now hand the conference back to the management for closing comments. Thank you. And over to you, sir.
Tribhuwan Adhikari
Yeah. Thank you, friends. Thank you for joining us on this conference call. We have outlined what we feel are going to be our strategy or our thought process in the coming financial year. And as I said in the very beginning, with the volatile situation, the geopolitical uncertainty in the markets right now we are keeping our fingers crossed. We are looking at whatever is happening in the geopolitical world and also on the economic front in the country. Hopefully things should turn out for the better because again, we are a global.
This is a global. This crisis affects the entire world. World. I’m sure the world leaders would get together and try to get out of this crisis rather than sticking on to their egos. So hopefully we started the year well. We started the year well and we are hopeful. Not only hopeful, I think we are positive that this year is going to be a better year than that last year. Looking forward to meeting you at the end of Q1 and discussing and analyzing the situation further. Thank you all. Thank you for participating in this thank
Lokesh Mundhra
You.
Tribhuwan Adhikari
Conference call.
Operator
Thank you, members of the management, on behalf of Access Capital Ltd. We conclude this conference. Thank you all for joining with us today. And you may now disconnect your line. Thank you.