L&T Finance Holdings net increases 22%

The company expects to break even this fiscal

L&T Finance Holdings reported a 22 per cent rise in its net profit to Rs 171 crore in the March quarter, riding on the back of a rising loanbook.

The company’s profit contribution was from its retail and corporate lending businesses. However, the firm booked losses in its asset management business, which it had acquired from Fidelity in the last financial year. L&T FH expects it to break even in FY14.

On the lending side, the company’s loanbook expanded 30 per cent to Rs 33,310 crore at the end March. The firm had acquired Indo Pacific Housing Finance in the third quarter of FY13.

In the fourth quarter, the company distributed loans worth Rs 140.5 crore. “We have seen healthy growth, given the macroeconomic situation,” said Y M Deosthalee, chairman and managing director of L&T Finance Holdings.

Its gross non-performing assets (NPA) were 2.03 per cent of the total and net NPA was 1.26 per cent. Gross and net NPAs came down sequentially by 29 basis points (bps) and 30 bps, respectively.

The company has a microfinance portfolio of about Rs 300 crore outside Andhra Pradesh, where microfinance firms have seen stoppage of operations due to a state government law that stopped repayments from the borrowers.

“We have completely provided for our AP portfolio,” Dinanath Dubhashi, CEO of L&T Finance told reporters.

For the full year, the company’s net profit was at Rs 559 crore, which rose 23 per cent, excluding the exceptional items.

In the third quarter of the last financial year, the firm had sold its stake in Federal Bank. Its profit for the full year, including the profit from the stake sale, was Rs 730 crore.

The company has said it has sought some clarifications from the Reserve Bank of India (RBI) on the new banking guidelines. “We are definitely interested, but it is premature to talk in terms of business strategy and other aspects as RBI is expected to issue clarifications on the guidelines” said N Sivaraman, president and whole-time director of L&T Finance Holdings.