L&T Finance Holdings conducted a conference call on 24 January 2024 to discuss its financial results for the quarter ended December 2023. Sudipta Roy, MD&CEO of the company addressed the call:

Highlights:

The company has recorded the highest ever quarterly retail disbursements in Q3FY2024.

The has continued to focus on enhancing customer acquisition, strengthening underwriting, reducing credit costs, brand building and capability building.

The company has achieved its Lakshya 2026 targets well ahead in FY24.

The share of the retail loan book has increased to 91%, while the growth momentum is expected to continue ahead.

The asset quality of the retail loan book remains in the guided range with gross stage 3 asset ratio at 2.95% and net stage 3 assets at 0.64% end December 2023.

The company has improved the RoA of the retail segment to 3.4% in Q3FY24.

The company has witnessed a decline in the credit cost to 2.52% in Q3FY24 from 2.67% in Q3FY23.

The company is confident to improve consolidated RoA to 2.8%-3.0% by FY26 end.

The personal loan disbursements were slow on account of strengthening of the underwriting standards and digitalization. The growth is expected to improve ahead.

The company has continued accelerated reductions in the wholesale book, which has dipped to Rs 7000 crore or 9% of the loan book end December 2023.

The company has sold a wholesale book of Rs 19000 crore to ARCs, of which Rs 4000 crore was received in cash. The company has provisions of Rs 7300 crore against SRs and net value of SRs stands at Rs 7700 crore.

The company expects to raise the share of the retail loan book to 95%, while the size of the whole loan book is expected to decline less than to Rs 5000 crore by March 2024.

The company expects the cost of borrowings to increase by 10-12 bps over the next 12 months on account hike in risk weights by the RBI.