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L&T Finance Holdings Q3 profit inches up to Rs 591 crore

The NBFC said it continued to deliver top quartile return on equity at 16.51 per cent.

ETMarkets.com|
Last Updated: Jan 17, 2020, 09.21 PM IST
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L&T Finance Holdings on Friday reported around 2 per cent rise in consolidated December quarter PAT at Rs 591 crore against Rs 580 crore reported for the same quarter a year ago.

The diversified non-banking financial company (NBFC) continued to maintain steady net interest margin and fee income, growing it to 7.29 per cent in Q3FY20 against 6.79 per cent a year ago. Pre-provisioning operating profit (PPOP) stood at Rs 1,334 crore for Q3FY20, up 12% year on year.

The NBFC said it continued to deliver top quartile return on equity at 16.51 per cent and its focused lending book expanded 14% year on year and it serviced over 1.19 crore customers through 223 branches and 1,450 meeting centres during the quarter.

“The company remained on the path of consistent financial performance with steady profit margins, stable asset quality and growth in focused businesses,” it claimed

The company raised more than Rs 10,000 crore in long-term borrowing during the quarter, which was its highest quarterly borrowing since FY17. It also sold a public issue of secured NCDs, which was oversubscribed 3.01 times the base issue size of Rs 500 crore and the issue was closed on the second day.

The company also effectively tapped PSL funding of Rs 1,818 crore in Q3FY20. The weighted average cost of funds remained steady at 8.54% in Q3FY20 against 8.50% in Q3FY19 and 8.61% in Q2FY20 despite diversification. The CP proportion fell from 16% to 9% YoY as long-term borrowing increased.

“The company continued to strengthen the balance sheet by concentrating on the focused lending businesses like rural finance, housing finance and infrastructure finance, while running down the defocused businesses,” its press statement said.

“NBFCs with strong parentage, AAA credit rating and prudent business practices have stood out and asserted their strength over the past year. Our robust business model, diverse sources of funding, steady growth and focus on asset quality, are in line with our strategy of building a stable and sustainable business. We have shown consistent performance across our focused businesses while building our inherent strengths to ensure better than industry performance when demand picks up,” Dinanath Dubhashi, Managing Director & CEO, said in his earnings commentary.
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