LIC Housing Finance shares surge led by strong growth, Q1 profit rose 34% on lower provisions

• LIC Housing Finance Ltd (LICHFL) shares jumped nearly 10% during the early trade minutes on Tuesday
• On Monday, the company reported a 34% jump in its net profit to ₹817.48 crore for the quarter ending June 30.
• Check out the latest news and updates on Business Insider.

One of India’s largest mortgage lenders, LIC Housing Finance Ltd (LICHFL) shares jumped nearly 10% during the early trade minutes on Tuesday after the company reported a 34% jump in its net profit to ₹817.48 crore for the quarter ending June 30.

Total income of the company rose 3.4% to ₹4,977.49 crore in April-June 2020.

The growth was cushioned mainly by the lower provisioning. The provisioning in the last quarter stood at ₹56 crore compared to around ₹253 crore in the year-ago period, according to the company regulatory filing.

“The rise in profit is mainly attributed to provisioning, which was lower in the quarter as compared to the last time (Q1 FY20). However, we have fully provided for whatever is required,” the company’s managing director and CEO Siddhartha Mohanty said.

According to the first-quarter financial results, almost 25% of the company’s loan book is under moratorium as of June 30. The individual home loans under moratorium accounted for 16% of the home loan portfolio, and nearly 77% of its developer loan book is under moratorium as of June 30.

The company’s total loan portfolio grew 6% to ₹2,09,817 crore.


Future Outlook

The company is expecting to see some pick-up in growth in the second quarter.

“With unlocking of activities, our business picked up, especially from the month of June 2020. Though the economic activities are likely to take some more time to recover, we are witnessing an increasing business trend month after month, and we are confident of a rebound in Q2 itself,” Mohanty said.

SEE ALSO: India's startup founders are opting for money in the bank instead of high valuations as they look to survive this pandemic

Top stocks to watch on Tuesday— Future Retail, Adani Enterprises, Wipro, Axis Bank, GMR Infra, LIC Housing Finance and more