L&T Finance Holdings Q2 results: Net profit rises 46% to Rs 595 crore

L&T Finance Holdings Ltd's (LTFH) consolidated net profit rose by 46 per cent year-on-year to Rs 595 crore for the second quarter ended September 2023. The uptick in interest margin and declining credit costs on retail loans, which have an 88 per cent share in the total book, boosted the bottom line.

Its net interest income rose by 11 per cent year-on-year to Rs 1,726 crore. The retail net interest margins (NIM) plus fees grew by 84 basis points to 12.16 per cent in Q2.

Dinanath Dubhashi, managing director and chief executive officer of L&T Finance Holdings Ltd, said the increasing share of retail helped to improve margins plus fees. NIMs plus is expected to be around 12 per cent in the current financial year.

The average cost of borrowings rose to 7.79 per cent in Q2FY24 from 7.33 per cent a year ago. The cost of funds may go up by 25-30 basis points further, he added.

Its credit cost on the retail book declined from 3.46 per cent in Q2FY22 to 2.74 per cent in Q2FY24.

Its total loan book – retail plus wholesale – expanded by 13 per cent year-on-year to Rs 78,734 crore. Retail grew by 33 per cent to Rs 69,417 crore. Its wholesale book, which the company is gradually shrinking, declined by 75 per cent to Rs 7,255 crore.

With a conducive outlook for the economy and credit offtake in FY24, the growth in the book is expected to be above 30 per cent, Dubhashi said.

Its capital adequacy ratio stood at 25.16 per cent (Tier-I: 22.99 per cent) in Q2FY24.