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
