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L&T Finance Holdings has
recorded 103% surge in net profit to Rs 530.93 crore in the quarter ended June 2023
(Q1FY2024).
The consolidated income from
operations increased 6% to Rs 3116.49 crore for the quarter ended June 2023, while
other income of the company jumped 38% to Rs 260.29 crore. The total income
increased 8% to Rs 3376.78 crore for Q1FY2024. Interest expenses declined 3% to
Rs 1363.76 crore. Operating expenses increased 27% to Rs 746.63 crore. The operating
profits improved 12% at Rs 1266.39 crore. The cost-to-income ratio was steady
at 37.1% in Q1FY2024 from 34.2% in Q1FY2023.
Depreciation rose 8% to Rs 29.59
crore, while provisions fell -35% to Rs 523.22 crore. Profit before tax surged 133%
yoy basis at Rs 713.58 crore. Effective tax rate eased to 25.7% in Q1FY2024
from 27.7% in Q1FY2023. Net Profit of the company, after share in profit of
associates and non-controlling interest, improved 103% to Rs 530.93 crore for
Q1FY2023.
The company has accelerated
retailisation momentum and maintained strong business growth. The company has achieved Lakshya 2026 goal of over 80%
retailisation much ahead of time. Retail
portfolio mix has increased to 82% in Q1FY24 compared with 54% in Q1FY23
and 75% in Q4FY23.
The Retail
disbursements increased to Rs 11193 crore, up 25% in Q1FY24 from Rs 8938 crore in
Q1FY23. Retail book increased to Rs
64274 crore, up 34% in Q1FY24 from Rs 47794 crore in Q1FY23.
Improved retail
asset quality with
GS3 at 3.21% and NS3 at 0.70% with provision coverage ratio of 79%. Retail RoA crossed the Lakshya FY26 target of
3.0% and reached 3.08% in Q1FY24. Retail
Return on Equity (RoE) at 15.67%
for Q1FY24 up 676 bps YoY
Net Interest Margins (NIMs) + Fees rose
to 11.71% in Q1FY24 from 11.57% in Q1FY23 and credit cost declined to 2.78% in Q1FY24
from 5.03% in Q1FY23.
Strong Balance Sheet with a Capital
Adequacy Ratio of 25.75% (Tier 1: 23.42%) in
Q1FY24 and adequate liquidity buffers in place.
Commenting on the financial results, Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings
Ltd. said, “It gives me immense pleasure to announce that we have
achieved Retailisation of 82% in Q1FY24 itself, much ahead of Lakshya 2026 goal
of greater than 80% Retailisation. In fact, we have been able to achieve most
of our Lakshya 2026 goals almost 3 years in advance. This achievement is
attributed to the twin strategy of strongly growing the retail asset book on one
side and ensuring a sharp reduction in the wholesale book on the other, while
maintaining best-in-class asset quality. On the fintech front, our customer
facing application PLANET has crossed 44 lakh downloads as on date and is constantly evolving to offer exciting features to
our customers, while servicing most of their requirements. Going forward, we will sustain our growth momentum and
continue to work towards creating a customer-focused and sustainable Fintech@Scale.
The Company will continue to develop digital finance delivery as a customer
value proposition thereby touching every part of the customer ecosystem through
our digital offerings.”
Book value per
share of the company stood at Rs 89.0 per share at end June 2023. Adjusted book
value (net of NNPA and 10% of restructured loans) per share of the company
stood at Rs 85.0 per share at end June 2023.
Business
performance
Retail
disbursements and book
The retail portfolio mix
now stands at 82% of the total loan book with strong retail disbursement of Rs
11193 crore (up 25% YoY) and retail book at Rs 64274 crore (up 34% YoY).
Rural Group
Loans & Micro Finance registered its highest ever quarterly
disbursements at Rs 4511 crore, recording a YoY growth of 18%
in Q1FY24. The business was aided by deepened geo-presence in
under-penetrated markets, stronger customer retention with healthy share of
vintage borrowers. A pilot of Rural Loan Against Property (Rural LAP), the
latest offering under the Rural Business Finance umbrella, was also initiated
in Madurai, Tamil Nadu.
Farm
Equipment Finance disbursements saw a YoY growth of 15% in Q1FY24 standing at Rs 1757
crore. The business witnessed growth on the back of improved on- field
productivity and enhanced customer retention through Kisan Suvidha top-up and
Refinance.
Two-Wheeler
Finance witnessed disbursements at Rs 1726 crore with a 14% increase in comparison
with Q1FY23. The Company continues to focus on collections led disbursements
while building a robust network of dealerships through new initiatives. The
business also witnessed the launch of two new products, Centum and VIP Pro to
cater to better credit profile customer segment.
Consumer
Loans continued to scale up while protecting portfolio quality with Rs 1162
crore disbursements in Q1FY24 compared with Rs 1010 crore in Q1FY23 (up 15%
YoY).
Housing
Loans and Loans Against Property showed sustained growth momentum
in Q1FY24 with a 39% increase in disbursements YoY at Rs 1299 crore.
SME Loans
also registered robust growth with disbursements at Rs 607 crore
in Q1FY24 as against a disbursement of Rs 68 crore in Q1FY23. During the
quarter, the business crossed overall disbursements of Rs 2000 crore since
inception on the back of increased geographical presence and concerted efforts
towards digitization and channel expansion. Maintained strong collection
efficiency across retail businesses through enhanced on-ground efforts, digital
initiatives and data analytics-based resource allocation
Accelerated
Reduction of the Wholesale portfolio
The Wholesale book saw an
accelerated and steep reduction of 65% YoY i.e., a reduction of Rs 25992 crore
YoY, while registering a reduction of Rs 5548 crore in Q1FY24 itself. This is
in line with the Lakshya strategy of strongly growing the retail book while
sharply reducing Wholesale.
Single
Lending Entity
In the fourth quarter of
FY23, LTFH had also initiated the merger of its subsidiaries - L&T Finance,
L&T Infra Credit and L&T Mutual Fund Trustee with itself i.e., the
equity-listed holding company. This strategic initiative was undertaken with
the intent of having the ‘Right Structure’ in place. The proposed merger has
been progressing well and the creditors and /or shareholders meeting to be convened,
pursuant to the directions of NCLT takes LTFH a step closer to creating a
single lending entity.
Financial Performance FY2023
The
consolidated income from operations increased 7% to Rs 12565.11 crore for the
nine-months ended March 2023, while other income of the company jumped 19% to
Rs 736.59 crore. The total income increased 8% to Rs 13301.70 crore for FY2023.
Interest expenses increased 1% to Rs 5797.24 crore. Operating expenses
increased 26% to Rs 2722.16 crore, allowing the operating profits to improve 8%
at Rs 4782.30 crore. The cost-to-income ratio increased to 36.3% in FY2023 from
32.9% in FY2022. Depreciation rose 8% to Rs 111.24 crore, while provisions fell
-18% to Rs 2540.41 crore. PBT before EO jumped 74% to Rs 2130.65 crore.
There is exceptional expense of Rs 2687.17 crore. As part of Lakshya
2026 strategy, the company has decided to reduce its wholesale loan asset
portfolio in the near term through accelerated sell down. Based on the change
in business model, the wholesale loan assets previously measured at amortised
cost have been reclassified and measured to fair value through profit and loss
as on 1 October 2022. The one-time impact of such reclassification consequent
to change in business model and fair valuation of the wholesale loan asset
portfolio, amounting to Rs 2687.17 crore has been presented as exceptional
items.
Thus
PBT after exception item turned negative to Rs 556.52 crore in FY2023. The tax
provisions declined 54% to Rs 172.37 crore. Net Profit of the company, after non-controlling
interest of negative Rs 86.77 crore and profit from discontinued operations of
2265.37 crore, improved 52% to Rs 1623.25 crore for FY2022.
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L&T Finance
Holdings: Consolidated Results
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Particulars
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2306 (3)
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2206 (3)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Income from operations
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3116.49
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2946.59
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6
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12565.11
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11704.17
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7
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Other Income
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260.29
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189.21
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38
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736.59
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619.38
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19
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Total Income
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3376.78
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3135.80
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8
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13301.70
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12323.55
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8
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Interest Expended
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1363.76
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1413.20
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-3
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5797.24
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5753.79
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1
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Operating Expense
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746.63
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589.53
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27
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2722.16
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2160.98
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26
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Operating Profits
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1266.39
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1133.07
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12
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4782.30
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4408.78
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8
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Depreciation /
Amortization
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29.59
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27.35
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8
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111.24
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102.64
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8
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Provisions and
Write-offs
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523.22
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798.94
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-35
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2540.41
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3083.29
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-18
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Profit before EO
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713.58
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306.78
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133
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2130.65
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1222.85
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74
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Exceptional Item
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0
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0
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-
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-2687.17
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0
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-
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PBT after EO
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713.58
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306.78
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133
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-556.52
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1222.85
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-146
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Tax Expense
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183.06
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85.13
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115
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172.37
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373.62
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-54
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Net Profit for the
period
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530.52
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221.65
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139
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-728.89
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849.23
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-186
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Share in profit/(loss)
of associate company
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0.00
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0.00
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-
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0.00
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0.00
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-
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Profit attributable to
non-controlling interest
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-0.41
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-0.93
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-56
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-86.77
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-20.87
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316
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PAT
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530.93
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222.58
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139
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-642.12
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870.10
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-174
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PPA
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0.00
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39.52
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-
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2265.37
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200.01
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1033
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PAT after PPA
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530.93
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262.10
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103
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1623.25
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1070.11
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52
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EPS* (Rs)
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8.6
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3.6
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7.4
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3.5
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Adj BV (Rs)
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85.0
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74.2
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86.4
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72.6
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* Annualized on
current equity of Rs 2479.97 crore EO and relevant tax. Face Value: Rs 10,
Figures in Rs crore
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PL: Profit to Loss,
LP: Loss to Profit
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Source: Capitaline
Corporate Database
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