How has been the historical performance of LIC Housing Fin.?

Revenue and Profit Growth

LIC Housing Finance’s net sales have shown a steady upward trend, increasing from ₹17,395 crore in FY19 to ₹28,110 crore in FY25. This represents a compound growth trajectory, with notable acceleration post-FY22. The total operating income mirrors this growth, reflecting the company’s expanding business scale.

Operating profit before depreciation and interest (PBDIT) has also improved significantly, rising from approximately ₹16,292 crore in FY19 to over ₹26,500 crore in FY25. Despite fluctuations in other income, the core operating profitability has remained robust, with operating profit margins (excluding other income) consistently above 84%, peaking at 94.3% in FY25.

Interest expenses, a major cost component for a housing finance company, have increased in line with business expansion, from ₹12,891 crore in FY19 to ₹19,528 crore in FY25. Nevertheless, gross profit (PBDT) has improved, reaching nearly ₹6,974 crore in FY25, up from around ₹3,404 crore in FY19.

Profit before tax has more than doubled over the period, climbing from ₹3,392 crore in FY19 to ₹6,876 crore in FY25. After accounting for taxes, the profit after tax (PAT) rose from ₹2,434 crore in FY19 to ₹5,440 crore in FY25, reflecting a healthy PAT margin improvement from 14.0% to 19.4%.

Balance Sheet and Capital Structure

The company’s shareholder funds have expanded substantially, from ₹18,265 crore in FY20 to ₹36,352 crore in FY25, supported by rising reserves which nearly doubled from ₹18,164 crore to ₹36,242 crore over the same period. This reflects strong retained earnings and capital accumulation.

LIC Housing Finance’s total liabilities have grown in tandem with its business, reaching ₹3,12,741 crore in FY25 from ₹2,16,393 crore in FY20. The bulk of this increase is attributable to short-term borrowings, which rose sharply from zero in FY20 to ₹2,62,354 crore in FY25, indicating a shift in funding mix and possibly increased reliance on short-term debt instruments.

Non-current liabilities have also increased steadily, reaching ₹2,36,085 crore in FY25. Deferred tax liabilities have fluctuated but remain a significant component of the long-term liabilities.

On the asset side, total assets have expanded from ₹2,16,393 crore in FY20 to ₹3,12,741 crore in FY25, driven primarily by growth in long-term loans and advances, which constitute the core lending portfolio. These loans increased from ₹2,07,975 crore in FY20 to ₹3,07,677 crore in FY25, underscoring the company’s expanding credit book.

Non-current investments and current investments have also grown, supporting the company’s asset diversification strategy. The book value per share has appreciated from ₹361.72 in FY20 to ₹660.46 in FY25, reflecting enhanced net asset value for shareholders.

Cash Flow and Operational Efficiency

Cash flow from operating activities has been negative consistently over the years, with the outflow reaching ₹16,609 crore in FY25. This is typical for a housing finance company expanding its loan book, as cash is deployed in lending activities. Cash flow from financing activities has been positive, indicating successful mobilisation of funds to support growth, with inflows of ₹17,413 crore in FY25.

Investing activities have generally seen outflows, reflecting investments in fixed assets and other financial instruments. The net cash inflow/outflow has been relatively stable, with a slight negative balance of ₹134 crore in FY25, indicating prudent cash management despite aggressive expansion.

Earnings per share (EPS) have shown a strong upward trend, rising from ₹48.23 in FY19 to ₹98.88 in FY25, nearly doubling over six years. This growth in EPS aligns with the company’s rising profitability and expanding equity base.

Summary of Historical Performance

Over the past six years, LIC Housing Finance has demonstrated consistent revenue growth, with net sales increasing by over 60%. Profitability has improved markedly, with operating and net profit margins expanding, supported by disciplined cost management and efficient interest expense control relative to income growth.

The company’s balance sheet has strengthened considerably, with shareholder funds nearly doubling and total assets expanding by over 40% since FY20. The growth in loan advances highlights the company’s core business expansion, while the rise in borrowings reflects active capital raising to fund this growth.

Despite negative operating cash flows, typical for a growing finance company, LIC Housing Finance has maintained stable liquidity through financing activities. The doubling of earnings per share over the period further underscores the company’s ability to generate shareholder value.

Overall, LIC Housing Finance’s historical performance reflects a well-managed growth trajectory, balancing expansion with profitability and capital adequacy, positioning it as a significant player in the housing finance sector.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →