10 July 2025
Housing Finance Companies (HFCs) are expected to report subdued performance in the April-June 2025 quarter (Q1FY26), characterized by flat asset growth, weak disbursements, and margin pressure due to increasing competition from banks and seasonal weakness.
The aggregate assets under management (AuM) of HFCs covered by PL Capital are projected to grow by just 1.1% quarter-on-quarter (QoQ) and 8.2% year-on-year (YoY), reaching Rs 3.7 lakh crore. This is a decline from the 3% QoQ growth seen in Q4FY25, according to a preview report by PL Capital. Disbursements are expected to decrease significantly by 26.5% QoQ to Rs 1.74 lakh crore, as Q1 is typically a seasonally weak period for the sector.
Net interest margins (NIMs) may contract by 3 basis points (bps) sequentially to 3.13%, as the effects of faster loan repricing and recent repo rate cuts between February and June 2025 begin to reflect in yields. Net interest income (NII) will likely remain flat QoQ, but will show a 9% YoY growth, amounting to Rs 2,780 crore.
Other income could drop by 44.3% QoQ to Rs 160 crore due to seasonality. However, operating expenses may decrease by 20.2% to Rs 556 crore, primarily driven by lower costs at LIC Housing Finance. Despite these fluctuations, the pre-provision operating profit (PPoP) is expected to remain flat at Rs 2,390 crore 2,390 crore.
Housing Finance Companies (HFCs) are expected to report subdued performance in the April-June 2025 quarter (Q1FY26), characterized by flat asset growth, weak disbursements, and margin pressure due to increasing competition from banks and seasonal weakness.
The aggregate assets under management (AuM) of HFCs covered by PL Capital are projected to grow by just 1.1% quarter-on-quarter (QoQ) and 8.2% year-on-year (YoY), reaching Rs 3.7 lakh crore. This is a decline from the 3% QoQ growth seen in Q4FY25, according to a preview report by PL Capital. Disbursements are expected to decrease significantly by 26.5% QoQ to Rs 1.74 lakh crore, as Q1 is typically a seasonally weak period for the sector.
Net interest margins (NIMs) may contract by 3 basis points (bps) sequentially to 3.13%, as the effects of faster loan repricing and recent repo rate cuts between February and June 2025 begin to reflect in yields. Net interest income (NII) will likely remain flat QoQ, but will show a 9% YoY growth, amounting to Rs 2,780 crore.
Other income could drop by 44.3% QoQ to Rs 160 crore due to seasonality. However, operating expenses may decrease by 20.2% to Rs 556 crore, primarily driven by lower costs at LIC Housing Finance. Despite these fluctuations, the pre-provision operating profit (PPoP) is expected to remain flat at Rs 2,390 crore 2,390 crore.
Stay Connected, Stay Informed –
Don’t miss out on exclusive updates, market trends, and real-time investment opportunities. Be the first to know about the latest unlisted stocks, IPO announcements, and curated Fact Sheets, delivered straight to your WhatsApp.