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L&T Finance Holdings has
recorded 46% surge in net profit to Rs 595.11 crore in the quarter ended September
2023 (Q2FY2024).
The consolidated income from operations rose 3%
to Rs 3168.54 crore for the quarter ended September 2023, while other income of
the company jumped 83% to Rs 313.53 crore. The total income increased 7% to Rs
3482.07 crore for Q2FY2024.
Interest expenses declined 8% to Rs 1324.91
crore. Operating expenses increased 26% to Rs 831.43 crore, allowing the
operating profits to improve 14% at Rs 1325.73 crore. The cost-to-income ratio
was rose to 38.5% in Q2FY2024 from 36.3% in Q2FY2023.
Depreciation rose 5% to Rs 28.33 crore, while
provisions fell 13% to Rs 500.01 crore. Profit before tax surged 44% yoy basis
at Rs 797.39 crore.
Effective tax rate eased to 25.5% in Q2FY2024
from 35.1% in Q2FY2023. Net Profit of the company, after share in profit of
associates and non-controlling interest, improved 46% to Rs 595.11 crore for
Q2FY2023.
The company has achieved highest
ever quarterly Retail disbursements at Rs 13499 crore, up 32% YoY driven by a robust business model, strong
growth across all retail segments coupled with top-notch digital and data
analytics
Retail portfolio mix now stands at 88% of the
total loan book; continued to outperform the Lakshya 2026 goal of achieving
greater than 80% Retailisation
The company has continued with the
accelerated reduction in the Wholesale book with a steep reduction of 76%
YoY, which translates to a reduction of Rs 28740 crore in line with
Lakshya 2026 strategy of gaining momentum towards becoming a top-notch, retail
finance company
The Retail PAT has jumped 86% yoy to Rs 606 crore, on the back of
strong Net Interest Margins (NIMs) + Fees (12.16% in Q2FY24 vs. 11.33% in
Q2FY23) and reduction in credit cost (2.74% in Q2FY24 vs. 3.46% in Q2FY23)
Retail book
size moved up up
33% YoY at Rs 69417 crore against Rs 52040 crore in Q2FY23. Retail portfolio mix increased to 88%
in Q2FY24 compared with 82% in Q1FY24 and 58% in Q2FY23
Retail Asset Quality improved with GS3 at 3.05% and NS3 at 0.67% with a provision coverage
ratio of 79%
Retail RoA improved to 3.32% and continued to
outperform against the Lakshya FY26 target. Retail Return on Equity (RoE) was at 16.31%
Commenting on the
financial results, Dinanath Dubhashi,
Managing Director & CEO, L&T Finance Holdings Ltd. said, “After
having achieved most of our Lakshya 2026 goals, it gives me immense pleasure to
announce that we have continued the trajectory of metamorphosizing into a
top-notch Retail finance Company. During the quarter, LTFH not only reached a
retail portfolio mix of 88%, but also achieved the highest ever quarterly
Retail disbursements of Rs 13499 crore, registering a growth of 32% YoY. 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 60 lakh downloads as of date
and is constantly evolving to offer exciting features to our customers, while
servicing most of their requirements.
Going
forward, we will continue to focus on sustainably delivering Lakshya goals
through a concentrated focus on 5 key pillars, namely enhanced customer
acquisition, sharpening credit underwriting, implementing futuristic digital
architecture, heightened brand visibility and capability building. At LTFH, we
strongly believe that the Retail segment holds promising opportunities, and we
will continue to grow and ride this growth by scaling up our product portfolio,
customer touchpoints, capability enhancements, and use of data analytics in
doing business. 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 89.35 per share at end September 2023.
Adjusted book value (net of NNPA and 10% of restructured loans) per share of
the company stood at Rs 86.58 per share at end September 2023.
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 1700 plus rural meeting
centers/branches and over 150 branches across urban centers, servicing over 90
lakh active customers. This extensive geographic presence is also supported by
9500 plus 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 38% of the Company’s quarterly
disbursements.
Healthy Retail
disbursements and book
The Retail portfolio mix now stands at
88% of the total loan book with strong Retail disbursement of Rs 13499 crore
(up 32% YoY) and Retail book at Rs 69417 crore (up 33% YoY).
Rural Group Loans
& Micro Finance registered
its highest ever quarterly disbursements during Q2FY24 at Rs 5740 crore,
recording a YoY growth of 30%. This growth was aided by a strong disbursal run
rate of over Rs 1900 crore, in the month of July and August 2023, coupled with
an optimized geographic mix which saw increased contribution from southern
states. Additionally, there was a focus on strengthening customer retention
with a substantial share of vintage borrowers that also encouraged growth for
the segment. As for the book, it saw a growth of 37% YoY and stood at Rs 21672
crore vs. Rs 15840 crore in Q2FY23.
Farm Equipment
Finance disbursements
during Q2FY24 saw a YoY growth of 18% at Rs 1534 crore vs. Rs 1304 crore in
Q2FY23. The business witnessed growth on the back of analytics driven dealer
relationships leading to higher counter share with top dealers and focused
customer retention through top up products. In addition, a 15% YoY growth in
disbursements was registered towards the New Tractor segment coupled with
enhanced customer retention through Kisan Suvidha, the top-up and refinance
product which contributed 25% of disbursements. The book size registered a
growth of 13% YoY and stood at Rs 13351 crore vs. Rs 11865 crore in Q2FY23.
Two-Wheeler Finance disbursements during
Q2FY24 saw a YoY growth of 6% at Rs 1817 crore vs. Rs 1721 crore in Q2FY23. The
Company continues to focus on analytics driven dealer relationships while
building a robust network of dealerships through new initiatives. During the
quarter LTF financed 7350 Electric Vehicles (EV) and partnered with Ather
Energy to finance up to 100% of the loan-to-value on purchase of Two-Wheeler
Electric Vehicles (EVs). The book size registered a growth of 18% YoY at Rs
9518 crore vs. Rs 8093 crore in Q2FY23.
Personal Loans segment continued to
scale up while protecting portfolio quality with a disbursement of Rs 1308
crore in Q2FY24 (up 13% Quarter-on-Quarter). During the quarter, the book size
reached Rs 6481 crore, with the entire focus being put on reimagining journeys
while leveraging the existing customer database and scaling up the e-aggregator
channel.
Home
Loans and Loans Against Property (LAP) disbursements showed sustained growth
momentum in Q2FY24 with Home Loan disbursements witnessing a YoY growth of 34%
to Rs 1356 crore vs. Rs 1013 crore in Q2FY23 while LAP disbursements
registering disbursement of Rs 378 crore against Rs 104 crore in Q2FY23. As for
the book size, Home Loan grew by 34% YoY and stood at Rs 12216 crore vs. Rs
9105 crore whereas for the LAP business it saw a growth of 14% YoY and stood at
Rs 3038 crore vs. Rs 2665 crore in Q2FY23.
SME Loans also registered robust
growth with Q2FY24 disbursements at Rs 872 crore vs. Rs 201 crore in Q2FY23.
During the quarter, the book size reached Rs 2413 crore, driven by 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 continued to
witness an accelerated and steep reduction. As of Q2FY24, the Wholesale book
stood at Rs 9318 crore, a reduction of 76% YoY. In absolute terms, the
Wholesale book reduced by Rs 28740 crore YoY from Rs 38058 crore as of Q2FY23.
On a sequential basis the Wholesale book saw a reduction of 35% from Rs 14292
crore as of Q1FY24. This accelerated reduction of the Wholesale book is in line
with Lakshya 2026 strategy of strongly growing the Retail while sharply
reducing Wholesale.
Moving to a Single
Lending Entity
In the
fourth quarter of FY23, LTFH initiated the merger of its subsidiaries - L&T
Finance Ltd., L&T Infra Credit Ltd., and L&T Mutual Fund Trustee Ltd.
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 proposal has been approved by the NCLT at Mumbai and Kolkata
and this takes LTFH closer to creating a single lending entity, subject to
remaining regulatory approvals.
Financial Performance H1FY2024
The consolidated income from operations
increased 4% to Rs 6285.03 crore for the half year ended September 2023
(H1FY2024), while other income of the company jumped 58% to Rs 569.14 crore. The
total income increased 7% to Rs 6854.17 crore for H1FY2024. Interest expenses declined
6% to Rs 2688.67 crore. Operating expenses increased 26% to Rs 1580.05 crore, allowing
the operating profits to improve 13% at Rs 2585.45 crore. The cost-to-income
ratio was higher at 37.9% in H1FY2024 from 35.3% in H1FY2023. Depreciation rose
6% to Rs 57.92 crore, while provisions fell 26% to Rs 1016.56 crore. Profit
before tax surged 75% yoy basis at Rs 1510.97 crore. Effective tax rate declined
to 25.6% in H1FY2024 from 32.5% in H1FY2023. Net Profit of the company, after
share in profit of associates and non-controlling interest, improved 68% to Rs 1126.04
crore for H1FY2023.
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L&T Finance
Holdings: Consolidated Results
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Particulars
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2309 (3)
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2209 (3)
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Var %
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2309 (6)
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2209 (6)
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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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3168.54
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3086.19
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3
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6285.03
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6032.78
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4
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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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313.53
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171.17
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83
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569.14
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360.38
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58
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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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3482.07
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3257.36
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7
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6854.17
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6393.16
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7
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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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1324.91
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1438.46
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-8
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2688.67
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2851.66
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-6
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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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831.43
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659.73
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26
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1580.05
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1249.26
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26
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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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1325.73
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1159.17
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14
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2585.45
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2292.24
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13
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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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28.33
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27.09
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5
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57.92
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54.44
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6
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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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500.01
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576.53
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-13
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1016.56
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1375.47
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-26
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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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797.39
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555.55
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44
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1510.97
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862.33
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75
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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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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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797.39
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555.55
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44
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1510.97
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862.33
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75
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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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203.17
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195.24
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4
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386.23
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280.37
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38
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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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594.22
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360.31
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65
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1124.74
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581.96
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93
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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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- |
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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-0.89
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-0.86
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3
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-1.30
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-1.79
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-27
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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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595.11
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361.17
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65
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1126.04
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583.75
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93
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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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45.26
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-
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0.00
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84.78
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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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595.11
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406.43
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46
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1126.04
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668.53
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68
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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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9.6
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5.8
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9.1
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4.7
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7.4
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3.5
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Adj BV (Rs)
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86.6
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75.3
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86.6
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75.3
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81.7
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72.6
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* Annualized on
current equity of Rs 2483.07 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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