L&T Finance Q2 results: Net profit rises 81% YoY on improved margins

L&T Finance Holdings Ltd’s (LTFH) net profit rose by 81 per cent year on year (YoY) to Rs 406 crore in the second quarter ended September 2022 on improvement in margins and fees.

The Net Interest Margin (NIM) plus fees grew to 8.43 per cent in September 2022, up 85 basis points over year ago level. Its stock closed flat at rs 79.05 per share on BSE.

Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings, said, the quarterly retail disbursements of Rs 10,238 crore in Q2Fy23 were at an all-time high. The share of retail in the portfolio mix has reached 58 per cent in Q2Fy23, up from 47 per cent in Q2FY22. The rural Business Finance (including erstwhile Micro Loans) witnessed quarterly disbursements of Rs 4,418 crore during the Quarter.

The retail book grew from Rs 40,934 crore in September 2021 to Rs 52,040 crore in September 2022. However, the wholesale book contracted from Rs 43,532 crore to Rs 37,597 crore. The total loan book rose to Rs 90,098 crore at the end of September 2022, up from Rs 86,936 crore.

The impact of One Time Restructuring (OTR) on unsecured loan portfolio is largely over. A strengthened balance sheet, stable asset quality and adequate additional provisioning position the company for growth in retail businesses, LTFH said in a statement.

Its Gross non-performing assets (NPAs) declined to 4.02 per cent in September 2022 from 6.48 per cent a year ago. The net NPAs also dipped from 2.92 per cent in September 2021 to 1.85 per cent in September 2022.

Its capital adequacy was 22.65 per cent (Tier 1: 19.85 per cent) and Debt to Equity (D/E ratio) at 4.18 times in Q2FY23.