Retail PAT was at Rs 472 crore, up 58% YoY, due to strong net interest margins (NIMs) + fees.

Retail NIMs + Fees stood at 11.87%, up 15 basis points (bps) YoY due to strong growth in retail disbursements. The company said that it has reported highest ever annual retail disbursements at Rs 42,065 crore, up 69% YoY.

The company's retail return on assets (RoA) and retail return on equity (RoE) stood at 2.95% and 16.32%, respectively in the quarter ended 31 March 2023.

Retail portfolio mix was at 75% in Q4 FY23 as compared to 51% recorded in Q4 FY22. Retail book stood at Rs 61,053 crore in Q4 FY23, up 35% YoY.

Improved Retail Asset Quality with GS3 at 3.41% and NS3 at 0.71% with provision coverage ratio of 80%.

The firm's net interest margin (NIM) increased to 7.63% for the quarter as against 6.58% reported in the corresponding quarter previous year.

On full year basis, the company's consolidated net profit surged 51.7% to Rs 1,623.25 crore on 7.94% increase in revenue to Rs 13,301.70 crore in FY23 over FY22.

Capital adequacy ratio stood at 24.52% (Tier 1 at 22.10%) in FY23 and adequate liquidity buffers in place

Average debt/equity ratio stood at 3.97x as on 31 March 2023.

Prudent asset liability management along with changing portfolio mix towards retail resulted in reduction in annual weighted average cost (WAC) by 4 bps to 7.46% in FY23 compared with 7.50% in FY22. This reduction has been achieved in spite of a rising interest rate environment. The company maintained adequate liquidity despite large inflows from prepayments and sell-downs in the wholesale book.

The wholesale book saw an accelerated reduction of 54% YoY to Rs 19,840 crore driven mainly by re/pre-payments and refinancing.

Commenting on the financial results, Dinanath Dubhashi, managing director & CEO, L&T Finance Holdings, said, “FY23 marks the first year of our four-year strategic plan - Lakshya 2026 and we are happy to announce that our retailisation now stands at 75%, which is almost nearing the greater than 80% retailisation goal of Lakshya envisaged for FY26. This achievement has been on account of a strong YoY growth of 35% in retail book with best-in-class asset quality and a decisive 54% reduction in the wholesale book.”

He further added, “The strategic initiatives that were undertaken during the year has helped the company in accelerating the fulfillment of the plan. Going forward, we will sustain our momentum towards creating a customer-focused and sustainable Fintech@Scale. The company will continue to offer retail products which encircle the entire customer ecosystem, creating a bespoke cross-sell and up-sell franchise and optimum distribution strategy.”

L&T Finance Holdings is a non-banking financial company (NBFC) that offers a range of financial products and services through its wholly owned subsidiaries.