(Reuters) – India’s LIC Housing Finance reported a bigger-than-expected second-quarter profit on Monday, helped by steady demand for its home loans.
The company said its profit after tax rose about 12% to 13.29 billion rupees ($158.1 million) for the quarter ended Sept. 30, outpacing analysts’ expectation of 12.26 billion rupees, per data compiled by LSEG.
The firm is 45%-owned by Life Insurance Corporation of India, the country’s top insurer.
Demand for homes in India, especially in the luxury category, is steadily rising, which, in turn, is fuelling demand for home loans.
The affordable housing segment is also seeing a pick up, helped by the government’s push for low-cost housing.
As a result, LIC Housing’s total loan disbursements grew 12% to 164.76 billion rupees during the second quarter.
“With stable interest rates, we expect steady growth in the next two quarters,” the company said in statement.
However, its net interest income – the difference between interest earned and paid – fell 6% to 19.74 billion rupees as its finance costs rose during the quarter.
LIC Housing’s net interest margin (NIM), a key gauge for profitability, shrunk for the second consecutive quarter to 2.71% from 2.76% in the first quarter due to increasing competition in the home finance sector, according to analysts.
It reported an NIM of 3.04% for the second quarter last year.
Rivals PNB Housing Housing and newly-listed Bajaj Housing Finance also reported a rise in quarterly profit, supported by higher demand for home loans.
Shares of LIC Housing ended 3.4% higher after its results.
($1 = 84.0725 Indian rupees)
(Reporting by Dimpal Gulwani in Bengaluru; Editing by Sonia Cheema)
