L&T Finance Holdings Consolidated Q1 Net Up 20% To Rs 178 Cr

L&T Finance Holdings Ltd posted a 20 per cent rise in consolidated net profit, at Rs 178 crore in the first quarter ended June 2021 (Q1FY22) on improvement in margins and fees. It had posted a net profit of Rs 148 crore in June 2020 (Q1FY21).

The consolidated net profit in the March 2021 quarter was at Rs 266 crore.

Its net interest margin (NIM) plus fees improved to 7.52 per cent in June 2021 quarter from 5.78 per cent a year ago (Q1FY21) on consolidated basis. Sequentially, it was down from 8.17 per cent in Q4FY21. Despite lockdown, collections during Q1FY22 grew about three times to Rs 13,166 crore from Rs 4,321 crore in FY21.

The provisions for impairment on financial instruments fell to Rs 791.46 crore in Q1FY22 from Rs 943.52 crore in Q1FY21. They were higher sequentially in comparison to Rs 504.02 crore in Q4FY21, according to filing with BSE. Its stock closed flat at Rs 94.85 per share on BSE.

The effect of the pandemic showed up in asset quality pressures with its gross and net non-performing assets (GNPAs) rising year-on-year and sequentially. The GNPA rose to 5.75 per cent in June 2021 from 5.24 percent a year ago and 4.97 per cent in March 2021. net NPAs were at 2.07 per cent in June 2021, up from 1.71 per cent in June 2020 and 1.57 per cent in March 2021.

The provision coverage ratio moderated to 65 per cent in June 2021 from 69 per cent in June 2020 and March 2021.

The loan book shrunk by 11 percent on Y-O-Y basis to Rs 88,440 crore in June 2021 from Rs 98,879 crore in June 2020. Its loan book stood at Rs 94,013 crore in March 2020.

Its rural finance book expanded by 8 per cent, Y-o-Y basis, to Rs 29,659 crore in June 2021. The housing finance book shrunk by 15 per cent to Rs 22,809 crore and infrastructure finance also by 15 per cent to Rs 33,280 crore.

Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings, said, despite severe impact of Covid 2.0, the learnings from Covid 1.0, helped in managing short-term challenges and maximise positive impact on business metrics.

The steps like shoring up liquidity, strengthening the balance sheet, following an analytics based collections approach and collection led disbursement strategy helped to minimize the downside, company said in a statement.

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