Leading non-banking lender L&T Finance Holdings on Monday reported a 15% rise in consolidated net profit at Rs 237 crore for the March quarter, driven by retail and wholesale advances.
Leading non-banking lender L&T Finance Holdings on Monday reported a 15% rise in consolidated net profit at Rs 237 crore for the March quarter, driven by retail and wholesale advances.
Income from operations grew 19.77% to Rs 1,957.96 crore in the fourth quarter ended March 31 while total disbursements jumped 20% to Rs 10,688 crore, Chairman and Managing Director Y M Deosthalee told reporters.
While retail credit grew 16% to Rs 7,284 crore, wholesale advances rose 29% to Rs 3,404 crore.
For the full year (2015-16), consolidated net expanded 16% to Rs 857 crore from Rs 736 crore, while total advances grew 22% to Rs 57,831 crore from Rs 47,232 crore in the previous year.
This is despite the company moderating its growth in farm equipment business due to the challenging environment in this sector.
On a standalone basis, however, the net income plunged 91% to Rs 16.17 crore for the quarter due to fall in income and increase in expenses, down from Rs 190.07 crore in the year-ago period.
Total expenses rose to Rs 10.12 crore from Rs 8.86 crore, while income declined to Rs 37.3 crore from Rs 198.3 crore in the same period a year ago.
Despite adverse market conditions, the company could improve its asset quality with net NPA coming down marginally to 2.05% from 2.10 a year ago.
Total assets under management grew 15% to Rs 25,945 crore from Rs 22,497 crore, while the share of equity assets soared 41% of the total AUM at Rs 10,316 crore, representing a 20% increase annually, Deosthalee said.
"There is a stress in rural and retail space, especially in rural areas. On the whole, it was a difficult year for the farm sector," Deosthalee said, adding, however, they saw growth in the infrastructure space, especially on operational projects and renewable energy sector.
"Asset quality in the infra space has been reasonably good, except for a small account that went in for restructuring during the year," he said.
According to Deosthalee, growth was led by healthy loans to key focus areas, including operational projects in renewable energy and roads, apart from housing, microfinance and two-wheeler loans.
Operational projects account for 61% of the total loans outstanding in the wholesale business, while B2C products constitute 61% of the total loans outstanding in the retail business, he added.
Going forward, Deosthalee said, "the company will further strengthen its position in operational infra projects in renewable and roads, structured corporate finance and retail products like funding tractors and two-wheelers as well as microfinance and housing."
500 Employees given pink slips citing poor performance
The company used to have a major presence in rural areas but has of late been scaling down exposure to the distress in the hinterlands, has given a pink slip to over 500 employees.
Deosthalee termed the sacking as "separation of staff from across the sectors based on their poor performance".
He also warned of more stress in the rural areas. "We may see some stress in the farm sector for the next five to six months. The situation may improve only in the second half of the year, that too if there is a normal monsoon," he said.
"What we have done is that we reviewed their performance and based on which slightly more than 500 employees have been separated from across the sectors which include retail, rural and other segments," Deosthalee said.
He pointed out that the rural sector was facing a lot of stress due to the consecutive failure of monsoon, and being a major player in these markets, especially in farm equipment finance, the company has been scaling down operations.
Drought in many parts of the country had left many farmers unable to repay loans. While demand for tractors had come down, the farmers' ability to repay loans has also diminished, he said.
Asked whether the company will reduce its lending rates, he said loan pricing has already fallen last fiscal. "I do believe that it may further come down by 50-60 basis points over next few months," Deosthalee said.
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