L&T Finance slips after Q4 PAT skids 31% YoY

L&T Finance Holdings (LTFH) slipped 1.39% to Rs 88.65 after the company's consolidated net profit dropped 30.9% to Rs 265.97 crore on 4.7% rise in total income to Rs 3,587.18 crore in Q4 FY21 over Q4 FY20.

The company said that the quarter continued to see economic recovery across sectors led by rural and infrastructure space, which helped its businesses. The company's rural franchise was strengthened with highest ever quarterly disbursements, with leadership positions in farm & two-wheeler financing. The company's infra finance segment witnessed robust sell down momentum which touched Rs 979 crore in the quarter and NIMs+fees increased to 8.17%, duly aided by lowest ever quarterly WAC at 7.65%.

In Q4FY21, the company continued to witness a strong pick up in disbursements, duly supported by robust sell down momentum in Infra finance and achieved highest ever quarterly disbursements in rural finance.

The company maintains a capital adequacy of 23.80%. As of March 2021, the company maintained liquid assets in the form of cash, FDs and other liquid investments to the tune of Rs 10,122 crore.

LTFH strengthened its balance sheet by maintaining adequate PCR on GS3 book and additional provision on non-GS3 book for any future economic uncertainty. As a prudent measure, LTFH is carrying additional provisions of Rs 1033 crore (1.2% of standard book) as of Q4FY21.

The share of retail portfolio in the overall book grew to 43.4% in FY21. Within the book, farm equipment grew 22% on YoY basis and TW book by 8%. The asset size of salaried home loans portfolio also grew by 6% in the same period.

Commenting on the financial results, Dinanath Dubhashi, the managing director (MD) and chief executive officer (CEO) of L&T Finance Holdings, said: "With normalcy returning in the latter half, our focused businesses have witnessed continued momentum in disbursements, with increased market share across desired businesses (15% in Farm and 11% in TW finance). At the same time, we have fully dealt with stress corresponding to first wave of COVID-19 and have adequately provided for the same through prudent provisioning in FY21 itself, and are well prepared to remain resilient on the back of strong fundamentals and a strengthened balance sheet. While the second wave has led to uncertainty and change in market dynamics, we believe that our strengths prepare us well to handle these circumstances."

"The merger of our three operating lending entities into one entity will enhance governance standards and we also believe that the simplified structure will lead to operational efficiencies and cash flow synergies, thereby creating long term value for stakeholders. Through FY21, LTFS has shown the ability to deal with extremely tough conditions and has emerged strongly. With the recent capital raise, we are suitably placed to deliver medium to long-term growth with increase in retailisation & well positioned to weather any short-term disruptions arising from second wave of COVID-19," he added.

L&T Finance Holdings is a diversified non-banking financial company (NBFC).

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