L&T Finance Q4 net Up 21.8%
L&T Finance Holdings reported 21.8% year-on-year increase in its fourth quarter (January to March) net profit.
By ET Bureau | Updated:
MUMBAI: L&T Finance Holdings reported 21.8% year-on-year increase in its fourth quarter (January to March) net profit at 171 crore, supported by strong loan growth and rise in other income. The net interest income, or the difference between interest earned and expended, rose 27% to 478 crore during the quarter. Net interest margins dropped 15 basis points to 5.64 % from 5.81%. One basis point is one-hundredth of a percentage point.
Disbursements in construction equipment and commercial vehicle segments fell 31.4% and 40.3%, respectively, the company said. However, rural product finance and infrastructure financing for the transportation sector showed healthy rise. "The poor disbursement growth on a yearly basis is a reflection of the general slowdown in the economy, absence of new capital expenditure cycle and stretched working capital cycles," the company said. "We expect demand to come from renewable energy, project finance, auto and refinance business," said N Sivaraman, president and whole-time director of L&T Finance.
The company restructured loans worth 450- 500 crore. The asset quality of the holding company declined due to deterioration in corporate loans, including infrastructure and SME sectors. The net non-performing loans increased to 406.3 crore, or 1.26%, from 291.4 crore, or 1.17 %, of total advances, while gross NPA rose to 2.03% from 1.80%.
The total provision for the quarter was Rs 115 crore, of which Rs 90 crore went towards NPAs of Family Credit, a non-banking finance company it had acquired from France's Societe Generale Consumer last October. Another Rs 14 crore was provided towards bad loans to MFIs in Andhra Pradesh.
It sees stress on asset quality for a while but expects improvement in the second half of the current financial year. The company raised Rs 750 crore through issuance of preference shares in March and the proceeds will be used for providing capital to subsidiaries. Shares of L&T Finance Holdings rose 0.32% to close at Rs 79.55 on the Bombay Stock Exchange on Thursday.
Disbursements in construction equipment and commercial vehicle segments fell 31.4% and 40.3%, respectively, the company said. However, rural product finance and infrastructure financing for the transportation sector showed healthy rise. "The poor disbursement growth on a yearly basis is a reflection of the general slowdown in the economy, absence of new capital expenditure cycle and stretched working capital cycles," the company said. "We expect demand to come from renewable energy, project finance, auto and refinance business," said N Sivaraman, president and whole-time director of L&T Finance.
The company restructured loans worth 450- 500 crore. The asset quality of the holding company declined due to deterioration in corporate loans, including infrastructure and SME sectors. The net non-performing loans increased to 406.3 crore, or 1.26%, from 291.4 crore, or 1.17 %, of total advances, while gross NPA rose to 2.03% from 1.80%.
The total provision for the quarter was Rs 115 crore, of which Rs 90 crore went towards NPAs of Family Credit, a non-banking finance company it had acquired from France's Societe Generale Consumer last October. Another Rs 14 crore was provided towards bad loans to MFIs in Andhra Pradesh.
It sees stress on asset quality for a while but expects improvement in the second half of the current financial year. The company raised Rs 750 crore through issuance of preference shares in March and the proceeds will be used for providing capital to subsidiaries. Shares of L&T Finance Holdings rose 0.32% to close at Rs 79.55 on the Bombay Stock Exchange on Thursday.
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