L&T Finance Holdings reports 52% yoy rise in Q2 PAT to Rs265cr; stock up 2%

With normalcy returning, NIMs+Fees have reached the desired range of 6.5%-7% despite carrying a negative carry of Rs64cr on additional liquidity.

Oct 23, 2020 09:10 IST India Infoline News Service

LnT Finance
The Board of L&T Finance Holdings (LTFH), Non-Banking Financial Company (NBFC), present in key lending businesses such as Rural, Housing and Infrastructure finance, Thursday announced the financial results for the quarter ended September 30, 2020.

L&T Finance Holdings Ltd is currently trading at Rs65.65, up by Rs1.3 or 2.02% from its previous closing of Rs64.35 on the BSE.

The company said in a regulatory filing on Thursday that LTFH is a market leader in Farm Equipment finance and Infrastructure finance, with a dominant position in Two-Wheeler finance and Micro Loans.

The company posted a consolidated PAT of Rs265cr in Q2FY21, a 52% increase yoy, up from Rs174cr in Q2FY20. PAT in Q2FY21 saw a 79% increase over Q1FY21, which stood at Rs148cr. PAT in Q2FY20, before impact of DTA was Rs647cr.

With normalcy returning, NIMs+Fees have reached the desired range of 6.5%-7% despite carrying a negative carry of Rs64cr on additional liquidity.        Reduction in GS3 from 5.98% to 5.19% yoy, NS3 reduced from 2.83% to 1.67% yoy, Increase in PCR from 54% to 69% yoy. 

“Structural liquidity remains comfortable at Rs17,449cr; with liquidity conditions remaining comfortable the focus is on further reducing cost of borrowing. AAA rating reaffirmed by CRISIL, ICRA, CARE and India Ratings. Furthermore, we made incremental macro prudential provisions of Rs512cr in Q2FY21 to strengthen our balance sheet

Excellent revival seen in rural and renewable sector; gained market share to become No.1 Farm Equipment financier for Q2FY21. Significant business momentum in Farm Equipment, Two-Wheeler and Renewable Finance. Moderate pick-up of disbursements in Micro Loan and Home Loan,” company said.

Commenting on the financial results Dinanath Dubhashi, Managing Director & CEO, LTFH, said, “As anticipated, Q2 saw a revival in the rural economy, which we believe will also drive the economic growth of the country for the next few quarters. In Q2, our Rural business witnessed significant growth momentum backed by our market leading position and strong digital and data analytics infrastructure for the lending business. The performance was also boosted by excellent pick up in disbursements in our renewable energy portfolio.

Furthermore, with the incremental macro prudential provisions made in the quarter we have a well provided for balance sheet. AAA rated NBFCs like LTFH are seeing a gradual easing out of liquidity conditions and our focus now would be to reduce excess liquidity and bring down the cost of borrowing.”

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