LIC Housing Finance lifts operating margin to 97.03% despite lower revenue
Costs fell 55.77% YoY against a 2.31% revenue decline, while other income contributed only 0.27% of pre-tax profit.
Filed 30 Jul 2026, 20:39 IST · after market close · LIC Housing Finance Ltd (LICHSGFIN)
Key takeaways
- Consolidated operating margin widened 3.58 percentage points YoY to 97.03% despite revenue declining 2.31%.
- Net profit rose 9.90% YoY to Rs 1,499.03 cr, but the tax rate increased 1.17 percentage points and limited the conversion of pre-tax gains.
- Management said online loan approvals were Rs 782 cr and prepayments were 11.7% of the opening book in Q1FY27.
Price around the results
Margin expands as expenses contract
On a consolidated basis, operating margin widened 3.58 percentage points YoY and 3.46 percentage points QoQ even as revenue declined 2.31% YoY and 1.79% QoQ. Expenses fell 55.77% YoY and 54.67% QoQ, so the cost base improved much faster than revenue. Other income contributed only 0.27% of pre-tax profit, making it a minor factor in the margin expansion.
Profit growth absorbs a higher tax rate
Pre-tax profit rose 11.53% YoY as interest expense fell 1.98%, but net profit growth was lower at 9.90% because the tax rate increased 1.17 percentage points. Sequentially, interest expense rose 3.34% and pre-tax profit fell 1.67%, while a 1.65-percentage-point reduction in the tax rate helped net profit edge up 0.43%. The five-quarter trend shows operating margin staying around 93% through Q4FY26 before this quarter's step-up to 97.03%.
Management flags loan approvals and conservative sanctions
Management said online loan approvals during Q1FY27 were Rs 782 cr. The presentation flags that pure floating-rate loans made up 99% of the individual-loan portfolio, while the loan-to-value ratio on incremental sanctions was 48%. Management also reported prepayments at 11.7% of the opening book and the installment-to-net-income ratio on incremental sanctions at 42%.
Margin leads peers; market response is still pending
LIC Housing Finance's 97.03% operating margin was 34.02 percentage points above the 63.01% median for the 35 Financial Services peers that had reported, placing it 34th from the bottom. The results were filed after market close, so there is no post-result reaction yet. In the last eight result reactions, the stock rose twice and fell six times, with a median absolute move of 3.88%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,083 cr | ₹7,212 cr | -1.79% | -2.31% |
| Other income | ₹5 cr | ₹2 cr | +128.00% | +1732.14% |
| Expenses | ₹210 cr | ₹463 cr | -54.67% | -55.77% |
| Operating profit | ₹6,873 cr | ₹6,749 cr | +1.84% | +1.44% |
| Operating margin (%) | 97.03% | 93.57% | — | — |
| Interest | ₹4,946 cr | ₹4,786 cr | +3.34% | -1.98% |
| Depreciation | ₹30 cr | ₹31 cr | -2.55% | +21.08% |
| Profit before tax | ₹1,901 cr | ₹1,933 cr | -1.67% | +11.53% |
| Tax | ₹402 cr | ₹441 cr | -8.78% | +18.07% |
| Net profit | ₹1,499 cr | ₹1,493 cr | +0.43% | +9.90% |
| EPS (₹) | ₹27.25 | ₹27.13 | +0.44% | +9.88% |
Operating margin of 97.03% compares with a Financial Services sector median of 63.01% across 35 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Online loan approvals during Q1FY27 were Rs.782 crore.
- Pure floating-rate loans represented 99% of the individual-loan portfolio as of Q1FY27.
- The loan-to-value ratio on incremental sanctions was 48% for Q1FY27.
- Prepayment as a percentage of the opening book was 11.7% for Q1FY27.
- Installment to net income ratio on incremental sanctions was 42% for Q1FY27.
What to watch
- Whether operating margin remains near 97.03%.
- Online loan approvals versus Rs 782 cr.
- Prepayments as a percentage of the opening book versus 11.7%.