On a consolidated basis, the NBFC posted a 20% rise in net profit to Rs 177.85 crore on 11.6% decline in total income to Rs 3,201.49 crore in Q1 FY22 over Q1 FY21.
The company recorded a 33.3% fall in net profit while total income declined 10.75% to Rs 3201.49 crore in Q1 FY22 over Q4 FY21.Profit before tax (PBT) stood at Rs 237.88 crore in Q1 FY22, rising 139% over Q1 FY21 and declining 67% over Q4 FY21.
Interest income fell by 9% to Rs 2,925 crore in Q1 FY22 over Q1 FY21. Net interest margin (NIM) improved to 6.31% in Q1 FY22 from 5.01% in Q1 FY21. L&T Finance said higher NIM was achieved through reduction in cost of borrowing and maintaining lower average liquidity in Q1FY22 as compared to Q1FY21.
The company said its operations were impacted in the month of April and May 2021 due to partial lockdown restrictions. In Q1FY22, the company said it utilized its Covid 1.0 learnings to address short-term challenges and maintained focus on building strengths across businesses. The measures sharply focused on shoring up liquidity, strengthening the balance sheet, following an analytics based collections approach, rigorously adhering to our collection led disbursement strategy as well as according top priority to employee care, with vaccination and financial support. These levers helped the Company minimize the downside and maximise the upside basis market drivers, across key business metrics such as Disbursements, Liability management, NIM + Fees and Credit cost. Furthermore, LTFH advanced its retailization (Rural + Retail Housing) strategy to 45% in Q1FY22, a stated long-term objective.
With gradual unlock of economy in June, disbursements bounced back, led by faster pickup in economic activity across Farm Equipment Finance (FE), Two-Wheeler Finance (2W), Consumer Loans (CL) and Infrastructure Finance businesses. Due to slower Industry pick-up, the Micro Loans (ML), Housing and Real Estate Business saw moderate uptick in collections and disbursements. Infrastructure Finance portfolio continued to see strong sectoral performance leading to high collections on account of sell-down and repayments/pre-payments.
Commenting on the financial results, Dinanath Dubhashi, MD & CEO of L&T Finance Holdings said, Despite severe impact of Covid 2.0, the learnings from Covid 1.0 held us in good stead in managing short-term challenges and helped maximise positive impact on business metrics. During FY21, LTFH was able to successfully navigate extremely tough conditions and emerge stronger. Our Q1FY22 performance reflects the fact that the Company has built a sustainable business model, one which will enable it to grow in the medium to long-term while dealing with any short-term challenges (including impact of Covid 2.0).
L&T Finance Holdings is a diversified non-banking financial company (NBFC).
Shares of L&T Finance fell 0.26% at Rs 94.85 on Friday.
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