L&T Finance Services (LTFH) lost 2.57% to Rs 89.10 after the company’s consolidated net profit fell 9.98% to Rs 222.99 crore on a 10.45% drop in revenue Total business transactions at Rs 3,051.82 crore in T2 FY22 compared to T2 FY21.
In the second quarter of fiscal 22, all L&T Finance Services (LTFH) activities experienced solid disbursement dynamics. Rural finance activities recorded the highest disbursement on record in the second quarter, at Rs 4,987 crore, up 51% quarter-on-quarter (quarter over quarter). Total disbursements during the quarter amounted to Rs 7,339 crore for the targeted companies.
Collections were normalized across businesses during the quarter, thanks to smart data analytics, concerted efforts on the ground, and a gradual unblocking of the economy. Collection efficiency reached pre-COVID-19 levels for all products.
In the Retail segment, the regular collection efficiencies in Farm stabilized at 90% and in two-wheelers at 98% for the T2 FY22. The efficiency of regular collections for micro-loans has exceeded 99% levels with increased resolutions in higher installments as well. In the Wholesale segment, escrow collections in the real estate portfolio in the second quarter of fiscal 22 have been normalized, increasing by 18% in one quarter, and are in line with the third quarter of fiscal year 21 and the fourth quarter of fiscal year 21. In the Infra segment, no impact was noted on operational projects in the areas of NHAI annuities, transmission and renewable energies. Collections from the toll highway portfolio jumped 112% from pre-COVID 19 levels in the quarter.
Liquidity remained comfortable in the second quarter of FY22 with a well-diversified liability profile. The focus on increasing low-cost long-term borrowing continued in the second quarter of FY22. LTFH raised Rs 5,030 crore in long-term debt in the second quarter of FY22 at a WAC of less than 6%, of which Rs 2,195 crore was funded by PSL. The company reported higher NIMs at 7.58% achieved year-over-year (year-on-year) thanks to greater distribution, lower cost of borrowing and maintaining lower average liquidity. As of September 2021, the company held liquid assets in the form of cash, FDs and other liquid investments to the tune of Rs 13,122 crore.
Beginning in fiscal 2019 and throughout the COVID-19 quarters, LTFH has made macroprudential arrangements for unforeseen future events, which has served the company well. Continuing this focus, in the second quarter of fiscal 22, LTFH cautiously carries additional provisions and OTR provisions of Rs 1,747 crore (2.22% of the standard ledger). These provisions are in addition to the ECL on GS3 assets and the normal ECL on standard assets. GS3 in absolute terms stood at Rs 4,796 crore in the second quarter of FY22, remaining almost stable on a QoQ basis. On a percentage basis, the company’s GS3 and NS3 assets stood at 5.74% and 2.81% respectively with a PCR on Stage III assets at 52%. Overall capital adequacy improved to 25.16% (Tier 1: 20.06%) and D / E stood at 4.40 in the second quarter of FY22.
In the second quarter of fiscal 22, the rural book recorded a growth of 3% quarter on quarter, supported by the growth in financing of agricultural equipment. The share of the retail portfolio in the overall portfolio increased to 47% in the second quarter of FY22. In Infrastructure Finance, there was an accounting decrease due to lower disbursements and increased sales / prepayments. The targeted pound stood at Rs 84,466 crore in the second quarter of FY22. In the investment management business, assets under global management crossed Rs 80,000 crore in September 2021, increasing by 5% in QoQ due to increased inflows. The Pure Equity & Hybrid mix for LTFH was 59% AUM versus 47% for industry.
Commenting on the second quarter financial results, Dinanath Dubhashi, Managing Director (MD) and Managing Director (CEO) of L&T Finance Holdings, said: “COVID 2.0 as well as the asymmetric monsoon and other macroeconomic factors have had an impact on the business environment in the second quarter. Despite this, LTFH’s rural finance activity recorded its best disbursement in the second quarter and saw a normalization of collections and disbursements. its strong digital and data analytics strategy. ”
Dubhashi added, “LTFH’s strong track record of consistently improving collections and disbursements throughout COVID quarters is reflected in its performance in the second quarter of FY22. Disbursement momentum will continue to accelerate. , supported by the company’s established ability to expand its product offerings. in retail by leveraging our digital and analytical strengths. LTFH is well prepared for any short-term disruption caused by COVID 2.0 and remains committed to continuing to serve its customers, helping them finance their livelihoods and aspirations.
L&T Finance Holdings is a diversified non-bank finance company (NBFC).
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