The shares of L&T Finance, a well-diversified Non-Banking Financial Company (NBFC) declined by 1% at ₹73.50 per share against the previous close at₹75.55 per share, in today’s early trade. The trade opened at ₹75.00 equity share representing a steep fall by 1% and hitting a high of ₹76.00 per unit in today’s trade.
LT Finance Holdings Ltd (LTFH) reported a 12% rise in net profit at Rs 326 crore in the third quarter ended December 2021 (Q3FY22) on improvement in net interest margin and fees. It had reported a net profit of Rs 291 crore in Q3FY21. Sub-sequentially, net profit rose by 46% from Rs 224 crore in Q2FY22.
LTFH, which is into retail, rural and infrastructure financing, saw improvement in earnings profile with net interest margins (NIM) plus fees rising 71 basis points Year-on-Year (YoY) to 8.1% in Q3. Sequentially also NIM plus fees rose by 52 basis points.
Dinanath Dubhashi, Managing Director & Chief Executive said the continuous realisation of the lending book will push NIMs up. Another aspect is the cost of funds, which are rising. The company has already raised long-term funds, protecting the balance sheet from rising finance costs. NIMs could moderate from 8.1 per cent level but are unlikely to decline below 7.5 per cent, he added.
As for asset quality, it showed a rise in Gross non-performing assets (NPAs) to 5.91 per cent in December 2021 from 5.12 per cent a year ago and 5.74 per cent in September 2021 (Q2FY22). The net NPA also rose to 3.03 per cent in December 2021 from 1.92 per cent in December 2020 and 2.81 per cent in September 2021. Overall capital adequacy accelerated to 24.1 per cent with Tier 1: 20.3 per cent in December 2021.
