L&T Finance Q4 net up 45%

Firm posts Rs 141 cr net in Jan-March 2012, but microfinance biz loss widens

L&T Finance Holdings today reported nearly 45% jump in consolidated profit in January-March quarter at Rs 141 crore, aided by strong loan growth.

The company had a net profit of Rs 97.35 crore in the same quarter in the previous fiscal.

For the full fiscal, net profit grew by 16.2% to Rs 454.80 crore, compared to Rs 391.17 crore a year ago.

Advances grew by 39.80% to Rs 25,016.98 crore compared to Rs 17,894.90 crore in FY11.

"We are happy to announce extremely good numbers despite trying times when the industry faced many travails such as a high interest rate regime and growth deceleration. Our overall numbers would have been much better had it not been for the Rs 90-crore write down in our micro-finance portfolio (MFI) in Andhra Pradesh apart from Rs 55 crore provisioning for there," L&T Finance Holdings Chairman Y M Deosthalee told reporters here.

L&T Finance Holdings is the only listed subsidiary of the engineering and construction giant Larsen & Toubro. This is first annual results after its listing last fiscal.

Healthy growth in profit was supported by strong improvement in overall loan book, improvement in net interest margin (6.25%) and higher operating efficiencies, Company President N Sivaraman said.

But the microfinance sector has been a big drag on the company and its profitability.

In states other than Andhra Pradesh, the company continued with its cautious approach. The aggregate loan portfolio outside AP amounted to Rs 132.21 crore.

In Andhra Pradesh, the company did not disburse any fresh loans towards microfinance while marginal collections continued.    

The company made a further provision of Rs 75 crore during the current year, taking the cumulative provision to Rs 134.67 crore.    

The firm's microfinance business posted a wider net loss before tax of Rs 122.86 crore for the year as against a loss before tax of Rs 37.71 crore in the previous year.

Excluding microfinance, gross NPAs stood at Rs 329.04 crore, or 1.33% of gross advances, the company said.

Its subsidiary L&T Infrastructure Finance Company (L&T Infra) achieved a growth of 45.98% during the year, while L&T Finance (L&T Finance) achieved a growth of 24.47% in loans and advances.