LIC Housing Finance aims to grow its loan portfolio to ₹3.5 lakh crore by the end of FY2027. To protect margins, the lender has raised interest rates by 25 basis points following the RBI repo rate hike. Investors are monitoring how this shift into project finance and non-home loans impacts asset quality and overall profitability.
LIC Housing Finance is targeting a loan portfolio of ₹3.5 lakh crore by the close of the current fiscal year (FY2027). The company, which currently holds a loan book of approximately ₹3.26 lakh crore, has announced an interest rate hike of 25 basis points, effective October 31, 2026. This adjustment follows the recent repo rate increase by the Reserve Bank of India, as the lender seeks to balance its cost of funds and maintain profit margins in a competitive lending environment.
To drive this expansion, the company is shifting its business strategy. It intends to rely less on traditional salaried home loans and instead capture higher profit margins by growing its non-home loan products. These include Loans Against Property (LAP) and Lease Rental Discounting (LRD). The lender aims to have these products account for 20% of its total portfolio by the end of the fiscal year.
Project finance is also a major focus, with the company targeting fresh sanctions of ₹4,000 crore this year. This segment is intended to act as a key income driver, though it also brings specific challenges. Historically, the developer finance sector has carried risks related to repayment delays and credit quality, which investors typically monitor closely when lenders scale up in this space.
Financially, the company reported a profit after tax of ₹1,508.78 crore for the quarter ended September 30, 2026. Maintaining profitability is a key priority, as net interest margins have faced pressure, hovering near 2.6%. The company is also working to manage its asset quality, with gross non-performing assets (GNPA)—loans that are overdue—reported in the 2.05% to 2.5% range.
The company’s stock has faced volatility over the past 12 months, experiencing a decline of approximately 13% to 14% as of late October 2026. This performance reflects broader market sensitivity to interest rate changes and the company’s ongoing efforts to streamline its portfolio.
Moving forward, the primary monitorable for investors will be whether the company can successfully execute its shift toward higher-margin products without compromising the quality of its loan book. Investors may also track the performance of the new project finance sanctions and whether the recent interest rate hikes lead to a noticeable improvement in profit margins in the coming quarters.