L&T Finance Holdings tumbles after Q2 results

L&T Finance Holdings fell 7.31% to Rs 117.35 at 11:08 IST on BSE after consolidated net profit rose 62.23% to Rs 559.12 crore on 27.45% increase in total income to Rs 3326.04 crore in Q2 September 2018 over Q2 September 2017.

The result was announced after trading hours yesterday, 24 October 2018.

Meanwhile, the S&P BSE Sensex was down 397.73 points, or 1.17% to 33,636.23.

On the BSE, 20.46 lakh shares were traded in the counter so far compared with average daily volumes of 16.99 lakh shares in the past two weeks. The stock had hit a high of Rs 122.25 and a low of Rs 111.20 so far during the day. The stock hit a 52-week high of Rs 213.05 on 25 October 2017. The stock hit a 52-week low of Rs 111.20 on 25 October 2018.

L&T Finance Holdings (L&TFH) said exposure to Infrastructure Leasing & Financial Services (IL&FS)'s related entities is at ~Rs 1,800 crore. L&TFH has exposure to specific SPVs (special purpose vehicles), which are subsidiaries of IL&FS Transportation Networks (ITNL). L&TFH said it has exposure to 4 annuity projects (3 operational, 1 CoD has been applied for) and 2 toll road projects (both operational). The cash flows for all the projects are secured through water-tight escrow accounts with LTFH having its lien. All the projects have debt service reserve account and other reserves amounting to ~Rs 450 crore. All projects are self sustaining without any further equity infusion required from the promoter, L&TFH added.

Further, L&TFH said the exposure to defaulter real estate firm Supertech is at ~Rs 800 crore. Project is ahead on sales, collections and repayment, while being on par against construction progress. L&TFH said it has already received pre-payment of Rs 42 crore through escrow mechanism.

Commenting on the results and financial performance, Dinanath Dubhashi, managing director & CEO, L&TFH, said that enabled by the strength of business model and a robust risk management framework, the company has successfully overcome multiple headwinds during the past two years. The firm's prudent asset liability management has ensured that its average borrowing cost is well in control despite hardening of interest rates. This is the second quarter where it has delivered top quartile RoE and has continued on its path of responsible growth. Additionally, over the last two years, L&TFH has successfully steered its portfolio towards 'retailisation', with a rapid increase in its rural and housing loan book. The company will continue to improve its competitive positioning, maintain NIMs plus fees income and strengthen asset quality.

L&T Finance Holdings is a financial holding company offering a focused range of financial products and services across rural, housing and wholesale finance sectors, as well as mutual fund products and wealth management services, through its wholly-owned subsidiaries, viz., L&T Finance, L&T Housing Finance, L&T Infrastructure Finance Company, L&T Investment Management and L&T Capital Markets.

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