 "Y M Deosthalee")
After rationalising its work force on a performance review, L&T Finance Holdings aims to sell private equity (PE) and proprietary investments worth Rs 800 crore, preferably in this financial year.
It will also consolidate its retail (to individuals) financing business under one corporate body. At present, the retail business, including two-wheelers, are being managed through three entities. It expects to complete this work in the next six months.
On the PE and prop investments, Dinanath Dubhashi, deputy managing director, said they do not yield income. There is, however, no timeline for this. The paring of investment is part of a strategy to improve the use of resources, enhance the return on equity (ROE) and profitability. ROE has been 10-11 per cent for four years and the aim is to move this to 17-18 per cent over three to four years. There are now clear milestones, which will be reviewed each quarter, Dubhashi said in an analyst call.
| FOCUS ON SECTORS |
Wholesale finance
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On the personnel rationalisation, Y M Deosthalee, chairman & managing director, told this newspaper the performance review and business portfolio rationalisation had coincided this time. Many people left as an outcome of that exercise. The company continues to hire in segments that are growing.
Following the business portfolio review, L&T’s financing unit will now focus on three businesses — wholesale, rural and housing, covering seven products. Earlier, it had a portfolio of 17 products.
The company has been able to keep asset quality stable despite significant cash flow pressure in the rural markets. Its gross non-performing assets (150-day dues norm) was 3.05 per cent (Rs 1,350 crore) of the total at end-March, as against 3.08 per cent (Rs 1,428 crore) in March 2015. Provisioning is in excess of Reserve Bank of India norms.
Loans and advances grew 22 per cent to Rs 57,831 crore at end-March, from Rs 47,232 crore a year ago. Net profit for the year ended March rose 16 per cent to Rs 857 crore, from Rs 736 crore earlier. Total income grew to Rs 7,471 crore in FY16 from Rs 6,337 crore in FY15.
