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L&T Finance Q4 profit jumps 28% YoY to Rs 406 crore

Mumbai: L&T Finance today posted 28% growth in consolidated profit after tax during the fourth quarter of the financial year aided by robust loan demand and improvement in asset quality.

During the quarter, company reported profit after tax of Rs 406 crore against Rs 316 in the same period a year ago. The board has recommended a dividend of Re 1 per equity share for the financial year ended March 31, 2018.

Its return on equity improved to 15.03% for FY18 as against 12.31% for FY17 – improvement of 272 bps. In March 2018 the company had raised Rs 3,000 crore through Preferential Allotment to Larsen & Toubro Limited and QIP.

“The improvement in profit was possible through retailisation of our portfolio and improvement in all key metrics,” Dinanath Dubhashi, Managing Director & CEO, LTFH. “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.”

By focusing on rural, housing and wholesale, the company reported 28% growth in loans in the financial year while disbursements grew 68%. This growth was made possible through improving competitive position across products, using digital and data analytics as a differentiator said Dubhashi.

“Rural economy has picked up after the lull post demonetization and lot of government schemes are helping the housing sector,” said Dubhashi.

For the financial year 2017-18, consolidated profit after tax rose 40% to Rs 1,459 crore from Rs 1,042 crore in FY17.

Asset quality improved with the help of better collection and turnaround in rural economy. Gross non-performing loans was at 4.80% while net NPA at 2.34% against 7.11% and 5.02% in the same period a year ago. The vigorously monitored early warning signals, concentration on early bucket collections and continuous efforts on GNPA resolution lead to reduction in NPAs, said Dubhashi.

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.

Shares of the company declined 1.15% to Rs 171.65 on the BSE.

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