L&T Finance Q4 net up 46% to Rs 501 cr on higher loan sales, margin

Retail-focused non-bank lender L&T Finance Holdings on Friday reported a 46 per cent year-on-year jump in consolidated net income to Rs 501 crore for the March 2023 quarter, boosted by better margins as its high-yielding retail book grew at a faster rate.

The company said for the full year, the consolidated net income rose 52 per cent to Rs 1,623 crore, as its retail portfolio rose to 75 per cent of the total loan book, up from 51 per cent a year ago, giving it a better margin.

The margin expansion was also surprising due to cheaper funds, which declined by 4 bps to 7.46 per cent for the year.

At 7.46 per cent, this was the lowest ever yearly weighted average cost of borrowing at 7.46 per cent, down 4 bps compared to FY22, in an environment of rising interest rates, the company said in a statement.

The year also saw the highest annual retail disbursements of Rs 42,065 crore, driven by strong growth across all retail segments, which in turn was an accelerated reduction in wholesale book by 54 per cent to Rs 19,840 crore.

The bottom line was also helped by better asset quality, which at the gross level stood under 3 per cent and at the net level below 1 per cent.

Net income from the retail book came in at Rs 1,384 crore, up 87 per cent for the year and Rs 472 crore in the reporting quarter, a growth of 20 per cent year-on-year.

Lower cost of funds had the company booking strong net interest margins at 11.54 per cent for FY23 and 11.87 per cent for Q4.