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L&T Finance Holdings has
recorded 46% jump in net profit to Rs 501.08 crore in the quarter ended March
2023 (Q3FY2023). The consolidated income from operations increased 10% to Rs 3210.70
crore for the quarter ended March 2023, while other income of the company
jumped 39% to Rs 206.83 crore. The total income increased 11% to Rs 3417.53 crore
for Q4FY2023. Interest expenses increased 4% to Rs 1444.89 crore.
Operating expenses increased 32% to Rs 758.45 crore, allowing
the operating profits to improve 10% at Rs 1214.19 crore. The cost-to-income
ratio increased to 38.4% in Q4FY2023 from 34.4% in Q4FY2022. Depreciation rose 3%
to Rs 28.53 crore, while provisions fell -20% to Rs 523.22 crore. Profit before
tax surged 58% yoy basis at Rs 662.44 crore.
Effective tax rate increased to 37.1% in Q4FY2023 from 30.8%
in Q4FY2022. Net Profit of the company, after share in profit of associates and
non-controlling interest, improved 46% to Rs 501.08 crore for Q4FY2022.
The company has accelerated
retailisation momentum and maintained strong business growth. Retail portfolio
mix now stands at 75% of the
total loan book compared with 51% in Q4FY22 and the company is well poised to achieve Lakshya 2026 goals ahead of
time. It accelerated reduction in wholesale book by 54% YoY to Rs 19840 crore.
The company
has recorded highest ever annual Retail disbursements at Rs 42065 crore, up
69% YoY. Retail book size crossed jumped
to Rs 61053 crore in Q4FY23, up 35% YoY.
Retail NIMs
+ Fees at 11.87%,
up 15 basis points (bps) YoY due to strong growth in retail disbursements. The company
has witnessed lowest
ever Yearly Weighted Average Cost (WAC) of borrowing at 7.46%, down 4 bps compared
with FY22, in an environment of
rising interest rates
The asset quality improved with retail GS3 moderating to 3.41% and
NS3 to 0.71% with provision
coverage ratio of 80%
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. 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.”
Book value per
share of the company stood at Rs 86.8 per share at end March 2023. Adjusted
book value (net of NNPA and 10% of restructured loans) per share of the company
stood at Rs 81.7 per share at end March 2023.
Business
performance
Robust
Retail disbursements & book
LTFH is expected to
achieve its Lakshya 2026 goals, well before time. In FY23, the retail book
witnessed a strong growth and crossed the Rs 61000 crore milestone (up 35%
YoY). This has led to a 75% retailisation of the total lending book. The
Company saw healthy disbursements on the back of strong collections which led
to consistent book growth across retail businesses.
Rural
Business Finance disbursements recorded a YoY growth of 70% in FY23. The business also
recorded the highest ever monthly disbursement of Rs 1596 crore in March 2023,
aided by focus on repeat customer conversion and green channel disbursals
Farmer
Finance disbursements saw a YoY growth of 25% in FY23. The business
witnessed the best ever Q4 disbursement (up ~35% on YoY basis) and achieved an
important milestone of financing more than 1 lakh new tractors in a fiscal year
for the first time
Two-Wheeler
Finance witnessed the highest ever Q4 disbursements at Rs 1727 crore with
a 25% increase in comparison with Q4FY22. The Company continues to focus on
building robust network of dealerships through new initiatives
Consumer
Loans continued to scale-up with Rs 4886 crore disbursements in FY23
compared with Rs 2254 crore in FY22 (up 117% YoY). Continued partnership with
various e-aggregators and seamless tech integration has made LTFH the partner
of choice
Housing
Loans and Loans Against Property showed sustained growth momentum
in FY23 with 97% increase in disbursements YoY. In FY23, the business
crossed Rs 500 crore monthly disbursal milestone
SME Loans
also registered robust growth where disbursements crossed Rs 1000
crore milestone in FY23. This vertical recorded the highest ever monthly
disbursement of Rs 274 crore in March 23 • Maintained strong collection
efficiency across Retail businesses through enhanced on-ground efforts and data
analytics-based resource allocation
Accelerated
Reduction of the Wholesale portfolio
The wholesale book saw an
accelerated reduction of 54% YoY to Rs 19840 crore driven mainly by re/pre-payments
and refinancing
Moving to
a Single Lending Entity
LTFH has also 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 non-lending,
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 LTFH expects the completion of the merger during the
current financial year, subject to regulatory approvals.
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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2303 (3)
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2203 (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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3210.70
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2918.75
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10
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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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206.83
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148.41
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39
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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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3417.53
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3067.16
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11
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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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1444.89
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1392.26
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4
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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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758.45
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575.65
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32
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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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1214.19
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1099.25
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10
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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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28.53
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27.78
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3
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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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652.36
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-20
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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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662.44
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419.11
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58
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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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662.44
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419.11
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58
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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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245.51
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128.93
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90
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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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416.93
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290.18
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44
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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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-84.15
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-0.89
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9355
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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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501.08
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291.07
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72
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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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51.17
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-100
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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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501.08
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342.24
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46
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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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8.1
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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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81.7
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72.6
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86.4
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72.6
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* Annualized on
current equity of Rs 2479.67 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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