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L&T Finance Holdings has
recorded 41% jump in net profit to Rs 640.18 crore in the quarter ended December
2023 (Q3FY2024).
The consolidated income from operations was flat
at Rs 3306.30 crore for the quarter ended September 2023, while other income of
the company jumped 62% to Rs 274.96 crore. The total income increased 3% to Rs 3581.26
crore for Q3FY2024.
Interest expenses declined -10% to Rs 1353.43
crore. Operating expenses increased 20% to Rs 860.41 crore, allowing the
operating profits to improve 7% at Rs 1367.42 crore. The cost-to-income ratio
was higher at 38.6% in Q3FY2024 from 35.9% in Q3FY2023.
Depreciation rose 3% to Rs 29.19 crore, while
provisions fell -20% to Rs 514.19 crore. Profit before tax surged 36% yoy basis
at Rs 824.04 crore. Effective tax rate increased to 22.4% in Q3FY2024 from 17.0%
in Q3FY2023. Net Profit of the company, after share in profit of associates and
non-controlling interest, improved 41% to Rs 640.18 crore for Q3FY2023.
The company has completed the merger of L&T Finance, L&T Infra Credit and
L&T Mutual Fund Trustee with L&T Finance Holdings in Q3FY24, thereby creating a ‘Single Lending Entity’
The surge in the net profit is driven by strong
Net Interest Margins (NIMs) + Fees (Consol.) at 10.93% in Q3FY24 against 8.80%
in Q3FY23 and reduction in credit cost (Consol.) to 2.52% in Q3FY24 from 2.67%
in Q3FY23.
The company has achieved highest
ever quarterly retail disbursements at Rs 14531 crore, up 25% YoY in
Q3FY2024, driven by a robust business
model, strong growth across all retail segments coupled with topnotch digital
and data analytics.
Retail book grew by 31% YoY to Rs 74759 crore vs. Rs 57000
crore in Q3FY23. The share of retail loan book grew to
91% against Lakshya 2026 target of >80% and 88% touched end September 2023.
Retail
Asset Quality was healthy with Gross Stage 3 (GS3) at 2.95% and Net Stage 3
(NS3) at 0.64% as against a target of GS3: <3% and NS3: <1%.
Net
Interest Income (NII) (Consol.) grew by 8% to Rs 1833 crore vs. Rs 1693
crore (YoY)
Return
on Assets (RoA) (Consol.) at 2.53% in Q3FY24, moved up up 87 basis
points (bps) YoY and 11 bps QoQ.
‘AAA
(Stable)’ rating was reaffirmed for L&T Finance Holdings by CRISIL, ICRA, CARE Ratings and India Ratings post-merger.
Commenting on the
financial results, Sudipta Roy, who
takes over as Managing Director and Chief Executive Officer of L&T Finance
Holdings on 24 January 2024 said, “It gives me immense pleasure to
announce that we have achieved all our ‘Lakshya 2026’ goals two years in
advance. With Retailisation at 91%, we have transitioned to a Retail NBFC
straddling the Rural and Urban ecosystem. Going forward, our key focus will be
on making Lakshya goals sustainable by ensuring that our performance is
consistent and predictable.
To achieve this, we have
concentrated our attention on executing strategy basis 5 key pillars, namely enhanced
customer acquisition through funnel creation and contiguous/new products,
sharpening credit underwriting by moving from a mono-axis underwriting to
multi-axis underwriting i.e., Credit Bureau plus Account Aggregator and
Orthogonal Signals, creating futuristic digital architecture, heightening brand
visibility through increased share of voice, and capability building by ramping
up tech talent.”
Business
performance
Robust
Retail Franchise
The Company’s granular and
deep pan India Retail franchise is led by its marquee distribution capabilities
namely, its geographic presence in around 2,00,000 villages from 1,700 plus
rural meeting centers/branches and over 150 branches across urban centers,
servicing over 93 lakh active customers. This extensive geographic presence is
also supported by over 10,000 channel relationships built over a decade. The
Company also leverages its 2.2 crore plus customer database to drive a credible
cross-sell and up-sell franchise, with up-sell contributing to 33% of the
Company’s Q3FY24 disbursements.
Healthy
Retail disbursements and book
The Retail Book now stands
at 91% of the total loan book with strong Retail disbursements of Rs 14531
crore (up 25% YoY) and Retail book at Rs 74759 crore (up 31% YoY).
Rural
Group Loans & Micro Finance registered healthy quarterly
disbursements during Q3FY24 at Rs 5476 crore, recording a YoY growth of 28%.
This growth was aided by a strong disbursal run rate of over Rs 1800 crore
during the quarter, coupled with a strong focus on strengthening customer
retention with a substantial share of vintage borrowers. As for the book, it
saw a growth of 32% YoY and stood at Rs 23110 crore vs. Rs 17485 crore in
Q3FY23.
Farmer Finance disbursements
during Q3FY24 stood at Rs 2027 crore while witnessing a 32% growth on a
sequential basis. The business growth was driven by proactive portfolio management
using digital and data analytics. The segment also saw enhanced customer retention
through upselling of Kisan Suvidha (comprising 18% of total disbursements),
which is a top-up & refinance product. The book size grew 11% YoY and stood
at Rs 13845 crore vs. Rs 12447 crore in Q3FY23.
Two-Wheeler Finance disbursements during Q3FY24 registered highest ever quarterly disbursements
in the quarter at Rs 2540 crore, a YoY growth of 18% vs. Rs 2146 crore in Q3FY23.
The Company continues to focus on analytics-driven dealer relationships while building
a robust network of dealerships through new initiatives. During the quarter
LTFH financed nearly 11000 Electric Vehicles (EV). The growth for the segment
was additionally driven by continued focus on increasing the Prime & EV
segment in Two-Wheeler with owing to deepening & new tie ups with leading
industry players. The book size grew 20% YoY at Rs 10447 crore vs. Rs 8716
crore in Q3FY23.
Personal Loans witnessed
disbursements to the tune of Rs 847 crore in Q3FY24 vs. Rs 1228 crore in
Q3FY23. During the quarter, the book size grew by 36% to Rs 6427 crore vs. Rs.
4719 crore in Q3FY23. This calibrated growth is driven by a well thought out
strategy as policies and strategies applicable to this product are currently
being revamped. Going forward, with relevant risk guardrails in place, the
Company envisages growth by leveraging on new partnerships and scaling up of
the online acquisition channel.
Home Loans and Loans Against Property (LAP) disbursements showed sustained growth momentum in Q3FY24
and witnessed growth of 67% to Rs 1998 crore vs. Rs 1199 crore in Q3FY23. As
for the book size, it saw a growth of 33% in Q3FY24 to Rs 16654 crore vs. Rs 12513
crore in Q3FY23.
SME Loans registered
robust growth with Q3FY24 disbursements at Rs 965 crore vs. Rs 538 crore in
Q3FY23. During the quarter, the book size reached the milestone of over Rs 3000
crore, primarily driven by increased geographical presence and expansion of
channel ecosystem through digital initiatives.
Collection Efficiency: Maintained superior and industry best collection efficiency across
Retail businesses through enhanced on-ground efforts, digital initiatives, and
data analytics-based resource allocation.
Financial
Performance 9MFY2024
The consolidated income from operations
increased 3% to Rs 9591.33 crore for the nine-months ended March 2023, while
other income of the company jumped 48% to Rs 786.47 crore. The total income
increased 5% to Rs 10377.80 crore for 9MFY2024.
Interest expenses declined 7% to Rs 4042.10
crore. Operating expenses increased 24% to Rs 2440.46 crore, allowing the
operating profits to improve 9% at Rs 3895.24 crore. The cost-to-income ratio rose
to 38.5% in 9MFY2024 from 35.5% in 9MFY2023. Depreciation rose 5% to Rs 87.11
crore, while provisions fell -27% to Rs 1473.12 crore. Profit before tax surged
59% yoy basis at Rs 2335.01 crore. Effective tax rate increased to 24.4% in
9MFY2024. Net Profit of the company, after share in profit of associates and
non-controlling interest, improved 57% to Rs 1766.22 crore for 9MFY2023.
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L&T Finance
Holdings: Consolidated Results
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Particulars
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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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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3306.30
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3321.63
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0
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9591.33
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9354.41
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3
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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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274.96
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169.38
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62
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786.47
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529.76
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48
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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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3581.26
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3491.01
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3
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10377.80
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9884.17
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5
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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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1353.43
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1500.69
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-10
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4042.10
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4352.35
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-7
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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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860.41
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714.45
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20
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2440.46
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1963.71
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24
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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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1367.42
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1275.87
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7
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3895.24
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3568.11
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9
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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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29.19
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28.27
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3
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87.11
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82.71
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5
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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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514.19
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641.72
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-20
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1473.12
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2017.19
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-27
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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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824.04
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605.88
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36
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2335.01
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1468.21
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59
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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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-2687.17
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-
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0
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-2687.17
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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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824.04
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-2081.29
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LP
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2335.01
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-1218.96
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LP
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-556.52
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1222.85
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PL
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Tax Expense
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184.67
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-353.51
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PL
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570.90
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-73.14
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PL
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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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639.37
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-1727.78
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LP
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1764.11
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-1145.82
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LP
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-728.89
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849.23
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PL
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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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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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-0.81
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-0.83
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-2
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-2.11
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-2.62
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-19
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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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640.18
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-1726.95
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LP
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1766.22
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-1143.20
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LP
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-642.12
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870.10
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PL
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PPA
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0.00
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2180.59
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-
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0.00
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2265.37
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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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640.18
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453.64
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41
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1766.22
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1122.17
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57
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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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10.3
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8.1
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9.5
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7.4
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7.3
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3.5
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Adj BV (Rs)
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89.1
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78.3
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89.1
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78.3
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81.7
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72.6
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* Annualized on
current equity of Rs 2487.58 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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