L&T Financial Holdings Quarter Results

MUMBAI:
L&T Finance Holdings Ltd. (LTFH) declared Consolidated PAT of Rs. 1,459 cr. for FY18 – a growth of 40% from Rs. 1,042 cr. in FY17. For Q4FY18, LTFH declared Consolidated PAT of Rs. 406 cr – a YoY growth of 28% over Rs. 316 cr. in Q4FY17.
RoE was 15.03% for FY18 as against 12.31% for FY17 – improvement of 272 bps. RoE for Q4FY18 stands at 15.06%. This RoE is achieved after infusion of Rs 3,000 Crs equity in March 2018 through Preferential Allotment to Larsen & Toubro Limited and QIP. This improved profitability was delivered on back of the following:
Growth in businesses: In its focus lending businesses, namely Rural Finance, Housing Finance and Wholesale Finance, LTFH recorded 68% YoY increase in disbursements and 28% YoY increase in assets in FY18. This growth was made possible through improving competitive position across products, using digital and data analytics as a differentiator and supported by a robust risk management framework.
LTFH also declared strong growth in its Investment & Wealth Management businesses. Average Assets under Management (AAUM) in Investment Management business increased to Rs. 65,932 cr in Q4FY18 from Rs. 39,300 cr. in Q4FY17 – a growth of 68%. Average Assets under Service (AAUS) in Wealth Management business increased to Rs. 18,346 cr in Q4FY18 from Rs. 13,623 cr. in Q4FY17 – a growth of 35%.
Improving asset quality: LTFH moved to recognition of GNPA at 90 days past due (DPD) since Q1FY18. LTFH has improved its asset quality substantially on back of vigorously monitored early warning signals, concentration on early bucket collections and continuous efforts on GNPA resolution. The company has also increased its provision coverage ratio to 52.51% as on March 31, 2018 as against 31.00% as on March 31, 2017, thus improving balance sheet strength further.
Restated to 90 DPD recognition of NPA
Improving Cost to income ratio: LTFH Cost to Income ratio has reduced to 23.16% in FY18 from 26.18% in FY17 on the back of productivity and efficiency gains.
Management Commentary:
Commenting on the results and financial performance, Dinanath Dubhashi, Managing Director & CEO, LTFH, said “We will continue improving competitive position across our products and will focus on increasing ‘retailisation’ of our portfolio. Robust growth, focus on fee income, improving productivity and significant improvement in asset quality have led to delivery of 15.03% RoE for FY18, even after injection of Rs. 3000 cr. capital during March, 2018.”