Lloyds Finance

The main reason has been higher interest expenditure, which recorded a jump of 119 per cent to Rs 62.15 crore. A 92 per cent drop in other income and a 40 per cent higher provision for depreciation have also made their contribution.

The earnings per share has dipped from Rs 33.44 to Rs 22.12 mainly on account increased equity share capital.

The equity more than doubled to Rs 31.22 crore on the conversion of part A of optionally fully converted debentures (OFCDs) issued during the first quarter of 1996.

However, the company has managed to improve its operational performance.

With a 63 per cent jump in operating profit, margins at the operating level improved from 82.78 per cent to 85.58 per cent.

 

This has been mainly on account of stringent control over administrative and general expenses. This is an improvement over previous year's jump of 51 per cent on this front.

Income from hire and lease purchase business which was around 62 per cent of the total income in the first half, is expected to move up as there has been a sharp increase in disbursements.

In automobile financing, disbursements have crossed Rs 200 crore in the first half, as against Rs 210 crore in the whole of 1995-96. Deposits have also shown a 45 per cent jump over the July 1996 level of Rs 354 crore.

With higher disbursements and good retail network, Lloyds Finance is expected to repeat its revenue growth in the near future.

However, profit margins would depend on Lloyds' ability to pass on the increasing cost of funds to customers as well as generate low cost funds.