L&T Finance Holdings Q4 consolidated net rises 15 per cent

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Mumbai | Published: May 3, 2016 5:21:32 AM

L&T Finance Holdings on Monday reported a 15.22% rise in its consolidated net profit for the quarter ended March 2016 at Rs 236.85 crore.

L&T Finance Holdings on Monday reported a 15.22% rise in its consolidated net profit for the quarter ended March 2016 at Rs 236.85 crore.

The company said its growth in profits was the result of consistent and steady improvement in key operating parameters along with stabilisation in the overall asset quality in the lending business and positive contribution by the asset management business.

Income from operations rose by 19.77% in the fourth quarter at R1,957.96 crore compared to the same period last year.

The average assets under management for the quarter of the investment management business grew by 15% to R25,945 crore from the same period last year.

Asset quality has improved with the gross non-performing assets (NPAs) as a percentage of total assets coming down by three basis points to 3.05% in the fourth quarter compared to the same period last year. Net NPAs also came down by five basis points to 2.05% on a year-on-year basis. It is noteworthy that the NPA figures under consideration are on 150 days past due.

The reduction in the NPA figures has been achieved by a substantial improvement in GNPAs of the farm portfolio while maintaining asset quality for the rest of the portfolio, the company indicated.

“In the last quarter we had decent collections, because of which there has been a small reduction in non-performing assets which is I think quite relieving given the current situation. So, the asset quality has not worsened. I am not suggesting here that there is no problem. Because we are still not out of woods as far as farm equipment is concerned. (In) the rural sector, everybody is awaiting

monsoon,” said YM Deosthalee, chairman and managing director.

Deosthalee indicated that even after a good monsoon, it will take two good quarters for the situation to normalise. “While, we have done reasonably well in reducing the non-performing assets in the March-ended quarter, it doesn’t mean that between the quarters there won’t be any volatility. However, we do believe that, for the year as a whole, there may not be any significant deterioration in asset quality,” he added.

The company pointed out that it carries (approximately) Rs 238 crore of provisions in excess of RBI norms.

L&T Finance said going forward it expects to strengthen its position in operational infrastructure projects especially renewables and roads, structured corporate loans, and in retail products like tractors, two-wheelers microfinance and housing finance.

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