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LTFH Q1FY25: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

LTFH Q1FY24: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

LTFH Q1FY24: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr

Company Overview:

L&T Finance Ltd., formerly known as L&T Finance Holding Ltd., is a Non-Banking Financial Company (NBFC) offering a diverse range of financial products and services. In March 2024, the company underwent a name change and applied for registration as a Systemically Important Non-Deposit Accepting Core Investment Company. As a subsidiary of Larsen & Toubro, which holds a 65.86% stake, L&T Finance benefits significantly from its parent company’s technical expertise and capital support.

Q1FY25 Results Update:

L&T Finance reported a robust financial performance for Q1FY25, with a 29% year-over-year (YoY) increase in Profit After Tax (PAT) to ₹686 Cr, and a 55 basis points YoY improvement in Return on Assets (RoA) to 2.68%. The company’s retail-focused strategy continued to deliver strong results, with the retail book comprising 95% of the overall portfolio and growing 31% YoY to ₹84,444 Cr. Consolidated book growth reached 13% YoY, the highest since Q1FY20. Net Interest Margins (NIMs) and fees remained steady at 11.08%, with NIMs increasing by 125 basis points YoY to 9.31%. Credit cost stability was maintained at 2.37% YoY.

Key Ratios Q1FY24 Q4FY24 Q1FY25
Yield 14.74% 15.53% 15.54%
Net Interest Margin 8.06% 9.14% 9.31%
Fee & Other Income 1.58% 2.11% 1.77%
NIM + Fee & Other Income 9.64% 11.25% 11.08%
Operating Expenses 3.81% 4.69% 4.45%
Pre-provision Operating Profit 5.83% 6.56% 6.63%
Credit Cost 2.33% 2.39% 2.37%
Return on Assets 2.13% 2.19% 2.68%
Debt / Equity (Closing) 3.42% 3.27% 3.41%
Debt / Equity (Average) 3.50% 3.22% 3.21%
Return on Equity 9.72% 9.53% 11.58%

L&T Finance introduced several strategic initiatives, including the beta launch of ‘Cyclops,’ an advanced credit underwriting engine, and a revamped home loan product. Additionally, the company partnered with PhonePe to expand its reach and broaden its sourcing channels. L&T Finance also achieved the ‘Great Place to Work-Certified®’ designation, underscoring its focus on employee satisfaction.

  • Retail Disbursement: Retail disbursements stood at ₹14,839 Cr, showing a 33% YoY increase but a slight 1% quarter-over-quarter (QoQ) decrease.
  • Retail Book: The retail book grew to ₹84,444 Cr, a 31% YoY increase and 6% QoQ growth.
  • NIMs+Fees: Consolidated NIMs+Fees were at 11.08%, improving by 144 basis points YoY but declining by 17 basis points QoQ.
  • PAT: Consolidated PAT reached ₹686 Cr, demonstrating strong growth of 29% YoY and 24% QoQ.
  • Profitability Metrics: Consolidated RoA improved to 2.68%, up 55 basis points YoY and 49 basis points QoQ, while consolidated Return on Equity (RoE) increased to 11.58%, up 186 basis points YoY and 205 basis points QoQ.
Lending Business – Business wise book split
Segment (₹ Cr) Q1FY24 Q4FY24 Q1FY25 Y-o-Y (%)
Farmer Finance
Farm Equipment Finance 13125 13892 14204 8%
Rural Business Finance
Rural Group Loans & Micro Finance Loans 19743 24716 25887 31%
Urban Finance
Two-Wheeler Finance 9190 11205 12025 31%
Personal Loans 5995 6440 6667 11%
Home Loans 11274 14550 15690 39%
LAP 2801 3893 4272 53%
SME Finance 1779 3905 4471
Acquired Portfolio 367 1435 1229
Retail Finance 64274 80037 84444 31%
Real Estate Finance 4096 2337 2310 -44%
Infrastructure Finance 9939 3191 1963 -80%
Wholesale Finance 14035 5528 4273 -70%
Focused Business 78309 85565 88717 13%
De-focused 257 -100%
Total Book 78566 85565 88717 13%

Retail Disbursement Growth:

  • Overall: Retail finance disbursements totaled ₹14,839 Cr in Q1FY25, a 33% YoY increase but a 1% decrease QoQ.
  • Rural Business Finance: Grew by 28% YoY to ₹5,773 Cr.
  • Urban Finance: Showed the highest growth, increasing by 44% YoY to ₹6,043 Cr.
  • Farmer Finance: Increased by 8% YoY to ₹1,903 Cr, with a 24% QoQ growth.
  • SME Finance: Grew by 61% YoY to ₹978 Cr but saw a 19% decrease from Q4FY24.
Lending Business – Business wise disbursement split
Particulars (Rs Cr ) Q1FY24 Q4FY24 Q1FY25 Y-o-Y (%)
Farmer Finance
Farm Equipment Finance 1757 1530 1903 8%
Rural Business Finance
Rural Group Loans (JLG) 4240 5639 5659 28%
Micro Finance (JLG) 271 129 114
Urban Finance
Two-wheeler Finance 1726 2502 2621 52%
Personal Loans 1162 968 1178 1%
Home Loans 1072 1823 1656 55%
LAP 227 690 588
SME Finance 607 1213 978 61%
Acquired Portfolio 130 549 141 9%
Retail Finance 11193 15044 14839 33%
Infrastructure Finance 1040 320 175 -83%
Real Estate Finance 132 3 4 -97%
Wholesale Finance 1172 323 179 -85%
Total Disbursement 12365 15366 15019 21%

 

Retail Book Growth:

  • Overall: The retail finance book grew to ₹84,444 Cr in Q1FY25, a 31% YoY increase and 6% QoQ growth.
  • Rural Business Finance: Grew by 31% YoY to ₹25,887 Cr, with a 5% QoQ increase.
  • Urban Finance: Increased by 32% YoY to ₹38,653 Cr, with a 7% QoQ growth.
  • Farmer Finance: Grew by 8% YoY to ₹14,204 Cr, with a 2% QoQ growth.
  • SME Finance: Demonstrated remarkable growth of 151% YoY to ₹4,471 Cr, with a 14% QoQ increase.

Asset Quality:

  • Retail Portfolio:
    • Gross Stage 3 (GS3) Assets: Increased from ₹2,063 Cr in Q1FY24 to ₹2,355 Cr in Q1FY25.
    • Net Stage 3 (NS3) Assets: Rose from ₹437 Cr to ₹511 Cr over the same period.
    • GS3 Ratio: Improved from 3.21% to 2.79%.
    • NS3 Ratio: Decreased from 0.70% to 0.62%.
    • Provision Coverage Ratio (PCR): Remained stable at around 78-79%.
  • Consolidated Portfolio:
    • GS3 Assets: Decreased from ₹3,172 Cr in Q1FY24 to ₹2,789 Cr in Q1FY25.
    • NS3 Assets: Decreased from ₹907 Cr to ₹688 Cr over the same period.
    • GS3 Ratio: Improved from 4.04% to 3.14%.
    • NS3 Ratio: Decreased from 1.19% to 0.79%.
    • PCR: Increased from 71% to 75%.

The image added is for representation purposes only

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