L&T Finance Holdings on Thursday reported a 41.79% increase in its third quarter consolidated net profit to Rs 384.09 crore compared with the same period last year.
L&T Finance Holdings on Thursday reported a 41.79% increase in its third quarter consolidated net profit to Rs 384.09 crore compared with the same period last year. Income from operations grew 25.61% on a year-on-year basis in the third quarter to Rs 2,630.17 crore. Total income rose by 24.94% to Rs 2701.02 crore. The growth in profits was achieved after taking accelerated credit cost of Rs 307 crore in order to further strengthen its portfolio, the company stated in its press release. The company is eyeing an equity issue to further strengthen is capital base, which presently comprises of 182.36 crore shares of Rs 10 each. The company’s board of directors is set to meet on January 31 to consider the fund raising, it said in an exchange notification. Asset quality improved in the quarter with gross non-performing assets (NPAs) declining 31 basis points sequentially to 5.49%, while net NPAs fell 44 basis points sequentially to 2.87%. The company’s provision coverage ratio stood at 49.11%. Return on equity (RoE) stood at 15.91%. Managing director and CEO Dinanath Dubhashi stated that the deliverables promised at the beginning of the strategic plan period are on track. “We endeavor to maintain strong earnings and continuously improve return on equity,” he said. The lending business witnessed an 88% growth in disbursements on a YoY basis with the rural finance segment growing 164%, housing finance 62% and wholesale finance 76%.
Wholesale financing accounts for 44.74% of revenues, followed by rural (25%) and housing (20%). Profitability was highest in the housing segment, which contributed 40% to total segmental profits in the quarter ended December 2017. The defocused business revenues further fell to 2% of total revenues (Rs 52 crore) from 6% (Rs 128 crore) in the same quarter of the previous year, in line with the management’s intent. But losses from the business stagnated at Rs 48 crore in the quarter vis-a-vis the same quarter of the previous year. The defocused business includes commercial vehicle finance, construction equipment finance, SME term loans and leases. The firm has declared its intent to focus on rural, housing, wholesale, investment and wealth management businesses as its core areas. Average assets under management (AAUM) in the investment management business increased by 71% to Rs 60,313 crore. Average assets under service (AAUS) in the wealth management business saw a growth of 51% to Rs 17,330 crore in the third quarter.