LIC HOUSING 2023-24 Annual Report Analysis

Thu, 8 Aug

LIC HOUSING has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

LIC HOUSING Income Statement Analysis

• Interest income during the year rose 20.1% on a year-on-year (YoY) basis.
• Interest expenses were up by 13.9% YoY during the same period.
• Operating expenses declined by 6.9% YoY during the year.
• The company's net interest income (NII) increased by 35.2% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.1% in FY24 as against 2.4% in FY23.
• Other income declined by 94.2% YoY during the year.
• Net profit for the year increased by 64.8% YoY.
• Net profit margins during the year increased to 17.5% in FY24 from 12.7% in FY23.

LIC HOUSING Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	227,139	272,770	20.1%
Other Income	Rs m	143	8	-94.2%
Interest Expense	Rs m	161,348	183,851	13.9%
Net Interest Income	Rs m	65,791	88,919	35.2%
Operating Expense	Rs m	29,637	27,591	-6.9%
Pre-provision Operating Profit	Rs m	36,298	61,336	69.0%
Provisions & Contingencies	Rs m	4	0	-100.0%
Profit before tax	Rs m	35,608	60,644	70.3%
Tax	Rs m	6,696	13,048	94.9%
Profit after tax	Rs m	28,910	47,630	64.8%
Minority Interest	Rs m	-4	-4	14.6%
Net Interest Margin	%	2.4	3.1
Net profit margin	%	12.7	17.5

Don't Miss: Key Information for Long-term Investors

LIC HOUSING Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 39.5 bn as compared to Rs 35.1 bn in FY23, thereby witnessing an increase of 12.7%.
• Advances for the year stood at Rs 2,805.2 bn as compared to Rs 2,677.6 bn during FY23, a rise of 4.8%.
• Cost of deposits for LIC HOUSING fell 28.8% and stood at 19.5%, while yield on advances rose to 0.0%.
• The lender's investments fell to Rs 71.0 bn during the year from Rs 74.3 bn in FY23.
• Borrowing stood at Rs 280.7 bn, a fall of 18.6% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 2,897.0 bn as against Rs 2,766.6 bn during FY23, thereby witnessing a rise of 4.7%.

LIC HOUSING Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	271,847	314,767	15.8%
Advances	Rs m	2,677,613	2,805,182	4.8%
Deposits	Rs m	35,054	39,503	12.7%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	27.4	19.5
Investments	Rs m	74,289	71,023	-4.4%
Borrowings	Rs m	344,696	280,677	-18.6%
Total Assets	Rs m	2,766,631	2,896,952	4.7%

Current Valuations for LIC HOUSING

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 86.6, an improvement from the EPS of Rs 52.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 649.1, stands at 5.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.1 times, while the price to income ratio stands at 1.0 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	412.9	495.9
Earnings per share (Unadj.)	Rs	52.6	86.6
Diluted earnings per share	Rs	52.6	86.6
Avg P/E ratio	Rs	7.0	5.8
Avg P/ABV ratio	Rs	0.9	1.1
Avg Market Cap	Rs	202,217	273,918
Dividends per share (Unadj.)	Rs	8.50	9.00

Ratio Analysis for LIC HOUSING

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio deteriorated and stood at 7,101.2x during FY24, from 7,638.5x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio decreased and stood at 1.02x during FY24, from 1.40x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): LIC HOUSING's capital adequacy ratio (CAR) was at 20.8% as on 31 March 2024 as compared to 18.2% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 15.1% during FY24, from 10.6% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 1.64% during FY24, from 1.04% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 8.80% during FY24, from 7.57% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. LIC HOUSING's gross NPA ratio stood at 3.3% as of 31 March 2024 compared to 4.4% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of LIC HOUSING was 1.6% in financial year 2024. This compared with 2.5% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	7,638.5	7,101.2
Debt to Equity Ratio	x	1.4	1.0
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	18.2	20.8
Return on Equity	%	10.6	15.1
Return on Assets	%	1.0	1.6
Return on Capital Employed	%	7.6	8.8
% of Gross NPAs	%	4.4	3.3
% of Net NPAs	%	2.5	1.6
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how LIC HOUSING has performed over the last 5 years, please visit here.

LIC HOUSING Share Price Performance

Over the last one year, LIC HOUSING share price has moved up from Rs 432.2 to Rs 649.1, registering a gain of Rs 217.0 or around 50.2%.

Overall, the S&P BSE SENSEX is up 19.8% over the year.

(To know more, you can check out historical annual results for LIC HOUSING here and quarterly results for LIC HOUSING here)