L&T Finance Holdings says Q4 net profit down 30% on one-time expenses

Quarter continued to see economic recovery across sectors led by rural and infrastructure space, company says.

L&T Finance Holdings Ltd (LTFH) on Friday reported a 30.9 per cent drop in consolidated net profit at Rs 265.97 crore for the quarter ended March 2021 (Q4 FY21). Profits were down due to one-time exceptional expenses like stamp duties for merger of subsidiaries and provisions for tax claims on Infra Debt Fund, said the company.

The company had posted consolidated net profit of Rs 384.86 crore in fourth quarter ended March 2020 (Q4 FY20). Its annual net profit for FY21 declined to Rs 948.88 crore from Rs 1,700.26 crore in FY 21. On Thursday, its stock closed 2.18 per cent lower at Rs 89.9 per cent in BSE.

Dinanath Dubhashi, Managing Director and chief executive officer of LTFH, said the Net Interest Margin (NIM) plus fees rose to 8.17 per cent in Q4Fy21 from 6.87 per cent in Q4 FY20. Reduction in cost of funds and better recoveries helped the company. The steady state NIM plus fees is about seven per cent, he added.

The quarter continued to see economic recovery across sectors led by rural and infrastructure space, said Dubhashi.

The company has fully dealt with stress corresponding to first wave of Covid-19 and have adequately provided for the same through prudent provisioning in FY21 itself.

The Gross Non-performance Assets (NPAs) declined to 4.97 per cent in Q4 FY21 from 5.36 per cent Q4 FY20. The provision coverage ratio improved from 59 per cent in Q4 FY20 to 69 per cent in Q4 FY21.

The second wave has led to uncertainty and change in market dynamics. It is prepared to remain resilient on the back of strong fundamentals and a strengthened balance sheet, Dubhashi said.

The total loan book in focused business stood at Rs 91,312 crore in March 2021 as against Rs 93,154 crore in March 2020.

Its capital adequacy ratio (CAR) 23.8 per cent in March 2021.