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LTFH Q3FY25: Retail Growth Shines Despite Profit Hit from Higher Provisions

LTFH Q3FY25: Retail Growth Shines Despite Profit Hit from Higher Provisions

Company Name: L&T Finance Ltd | NSE Code: LTF| BSE Code: 533519 | 52 Week high/low: 194 / 129 | CMP: INR 139 | Mcap: INR 34,758 Cr | P/BV – 1.44

About the stock
➡️LTFH is leading NBFC cater diversified financial lending prodcut in both rural and urban areas. Its offer consumer loan, 2W loan, home loan, MFI, farm and SME loans. Distribution network remain strong with 13,200+ distribution touch point, pan India presence in 2 lakh villages/100+ citiesand cover 18 states in India.

Reatil book shine up (23% YoY) led by 2W, HLand MFI segment
➡️LTF retail loan book has been contributing 97%> of overall loan book, company achieveing its FY2026 lakshya goal. Retail book grew 23% YoY (+4% QoQ) to 92,224 Cr driven by 2W, HL and MFI segment. 2W book contribute 14% of retail book, growing 21% YoY and MFL contribute 28% of retail book, growing 14% YoY and Home loan contribute 20% of retail book, growing 37% YoY in Q3FY25.

➡️The total book increased by 16% YoY (+2% QoQ) to 95,120 Cr led bt strong growth in retail book.

➡️Whole sale book report degrowth by 59% YoY growth but its weight has been reduce to only 3% in overall loan book in Q3FY25.

➡️Retail disbursement grew 5% YoY (+1% QoQ) to 15,210 Cr led by 2W and home loan segment. While MFL shake the disburesement growth down by 16% YoY and its contribute 29% of retail disbursement.

➡️Company’s borrowing growth in line with credit growth. Borrowing grew at 13% YoY to 86,161 Cr during the quarter.

NII grew on book growth, PAT down on higher provision
➡️Interest income grew 15% YoY (+4% QoQ) to 3,806 Cr driven by robust retail book growth and while yield decline by 56 bps YoY. NII increased 15% YoY (+3% QoQ) to 2,237 Cr attributed to book expansion while NIMS contract by 47 bps YoY.

➡️PPOP grew robust at 16% YoY (+4% QoQ) to 1,553 Cr thanks to higher other income and stable other OpEx. Profitability suffered decline 23% YoY (-10% QoQ) to 626 Cr due to higher provision expense (up 117% YoY).

Asset quality dissapoint on QoQ basis
➡️LTFH asset quality has maintain on YoY basis and sequentailly. GNPA up 2 bps YoY and 4 bps QoQ to 3.23% while NNPA dissapoint YoY as well as sequentially by 16 bps/1 bps to 0.97%. Its normal effect due to the lower base on last quarter while NNPA below the management target of 1% till FY26.

Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.44 Price to book value. Yield on loan down 56 bps to 15.04% while CoF remain stable at 7.83% YoY. This result in contraction in NIMs by 47 bps to 8.5% as of Q3FY25. credit cost remain stable at 2.49% YoY while decline by 10 bps QoQ.

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LTFH Q2FY25: Strong Retail Loan Growth, NIM Expands, CoF Remains Stable

LTFH Q2FY25: Strong Retail Loan Growth, NIM Expands, CoF Remains Stable

Company Name: L&T Finance Ltd | NSE Code: LTF| BSE Code: 533519 | 52 Week high/low: 194 / 127 | CMP: INR 167 | Mcap: INR 41,591 Cr | P/BV – 1.71

About the stock
➡️LTFH is leading NBFC cater diversified financial lending prodcut in both rural and urban areas. Its offer consumer loan, 2W loan, home loan, MFI, farm and SME loans. Distribution network remain strong with 13,200+ distribution touch point, pan India presence in 2 lakh villages/100+ citiesand cover 18 states in India.

Reatil book shine up (28% YoY) led by 2W, HLand MFI segment
➡️LTF retail loan book has been contributing 95%> of overall loan book, company achieveing its FY2026 lakshya goal. Retail book grew 28% YoY (+5% QoQ) to 88,975 Cr driven by 2W, HL and MFI segment. 2W book contribute 14% of retail book, growing 33% YoY and MFL contribute 30% of retail book, growing 22% YoY and Home loan contribute 20% of retail book, growing 39% YoY in Q2FY25.
The total book increased by 22% YoY (+5% QoQ) to 93,015 Cr led bt strong growth in retail book.
➡️Whole sale book report 56% YoY growth but its weight has been reduce to only 4% in overall loan book in Q2FY25.
➡️Retail disbursement grew 12% YoY (+2% QoQ) to 15,092 Cr led by 2W and home loan segment. While MFL shake the disburesement growth down by 5% YoY and its contribute 35% of retail disbursement.
➡️Company’s borrowing lagging in line with credit growth. Borrowing grew half of loan book growth at 11% YoY to 84,912 Cr during the quarter.

Key metrics  Q2FY25 Q2FY24 YoY (bps) Q1FY25 QoQ (bps)
Yield 15.38 15.23 15 15.54 -16
CoF 7.8 7.79 1 7.85 -5
NIMs 8.94 8.62 32 9.31 -37
Credit Cost 2.59 2.58 1 2.37 22
ROA 2.6 2.42 18 2.68 -8
ROE 11.65 10.81 84 11.58 7
PCR 71 76 -500 75 -400
CAR 22.16 25 -284 22 16

NII grew on book growth, yield expansion and stable CoF
➡️Interest income grew 15% YoY (+6% QoQ) to 3,654 Cr driven by robust retail book growth and expansion in yield by 15 bps YoY. NII increased 18% YoY (+4% QoQ) to 2,178 Cr attributed to NIMs expansion by 32 bps YoY and stable CoF at 7.8%. PPOP grew robust at 25% YoY (+14% QoQ) to 1,490 Cr thanks to higher other income and stable other OpEx. Profitability comes in line with topline, grew 17% YoY (+2% QoQ) to 697 Cr due to higher provision expense (up 40% YoY).

All figures are in Cr.

Years  Q2FY25 Q2FY24 YoY (%) Q1FY25 QoQ (%) Commentry
Interest income  3,654.41 3,168.54 15% 3,452.62 6% Driven by book growth and yield expansion
Interest expenses 1,476.28 1,324.91 11% 1,351.41 9%
NII 2,178.13 1,843.63 18% 2,101.21 4% led by stable CoF and Nims jump by 32 bps YoY
Other income  369.61 313.53 18% 331.99 11%
Total Net income 2,547.74 2,157.16 18% 2,433.20 5%
Employee expenses 548.78 448.62 22% 519.34 6%
Other OpEx 508.88 515 -1% 601.41 -15%
Total Opex  1057.66 963.62 10% 1120.75 -6%
PPOP 1,490.08 1,193.54 25% 1,312.45 14% Grew by other income and stable other Opex
Provision 550.51 396.15 39% 390.18 41%
PBT 939.57 797.39 18% 922.27 2%
Tax expenses  242.89 203.17 20% 237.02 2%
Tax rate  26% 25% 1% 26% 1%
PAT  696.68 594.22 17% 685.25 2% Kick in opEx efficiency offset by higher provision,
PAT grew in line with NII
PAT% 17% 17% 1% 18% -4%
EPS 2.79 2.39 17% 2.75 2%
No. of equity shares  249.26 248.3 0% 248.98 0%

Asset quality dissapoint on QoQ basis
➡️LTF asset quality has maintain on YoY basis but decline sequentailly. GNPA down 8 bps YoY but jump 5 bps QoQ to 3.19% while NNPA dissapoint YoY as well as sequentially by 14 bps/17 bps to 0.96%. Its normal effect due to the lower base on last quarter while NNPA below the management target of 1% till FY26.

Asset Quality Q2FY25 Q2FY24 YoY (bps) Q1FY25 QoQ (bps)
GNPA 3.19 3.27 -8.00 3.14 5
NNPA 0.96 0.82 14.00 0.79 17

Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.71 Price to book value. Yield on loan jump 15 bps to 15.38% while CoF remain stable at 7.8% YoY. This result in expansion in NIMs by 32 bps to 8.94% as of Q2FY25. credit cost remain stable at 2.59% YoY while increased by 22 bps QoQ.

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