L&T Finance Holdings Ltd reported its Q1FY24 earnings, showcasing significant growth in revenue and profits. Here’s an analysis of the key highlights from the earnings report:
- Revenue Growth: L&T Finance’s total revenues for the quarter ending June 2023 reached Rs. 3,376.78 crores, marking a 6.34% jump compared to the same period last year. On a quarterly basis, there was a minor decline of -1.19% in revenue compared to the previous three months.
- Profit Surge: The Company’s net profit witnessed a remarkable 102.57% increase since the same period last year, reaching Rs. 530.93 crore in Q1FY24. Additionally, on a quarterly basis, net profits increased by 5.96% compared to the previous three months.
- Net Profit Margins: L&T Finance’s net profit margins also saw substantial growth, rising by 90.48% since the same period last year to 15.72% in Q1FY24. On a quarterly basis, net profit margins experienced a 7.24% increase compared to the previous three months.
- Growth Factors: The Company attributed its impressive performance to a strategic focus on retailization. With retailization reaching 82% in Q1FY24, L&T Finance surpassed its Lakshya 2026 goal of over 80% retailization well ahead of schedule. This growth was achieved through a strategy that emphasized expanding the retail asset book while reducing the wholesale book.
- Net Interest Income: L&T Finance’s net interest income increased by 5.76% year-on-year to ₹3,116.5 crore in Q1FY24. The net interest margin (NIM) plus fees reached 11.71%, reflecting a 14 basis points (bps) year-on-year increase. The company’s credit cost also decreased to 2.78% in Q1 FY24 from 5.03% a year ago.
- Asset Quality: The company reported improved retail asset quality with gross stage 3 (GS3) at 3.21% and net stage 3 (NS3) at 0.70%. The provision coverage ratio stood at 79% in Q1FY24.
- Retail Portfolio Expansion: L&T Finance reported strong retail disbursements at ₹11,193 crore in Q1FY24, reflecting a 25% year-on-year increase. The retail portfolio mix now accounts for 82% of the total loan book, a substantial growth from 54% in Q1FY23.
- Capital Adequacy and Liquidity: The Company reported a capital adequacy ratio of 25.75% in Q1FY24 and emphasized having adequate liquidity buffers in place.
In conclusion, L&T Finance’s Q1FY24 earnings report reveals robust growth in revenue, profits, and net profit margins. The company’s strategic focus on retailization and asset quality improvement, along with successful growth in retail disbursements and portfolio expansion, contributed to its strong performance. Additionally, the company’s emphasis on digital finance delivery reflects its commitment to enhancing customer value through innovative offerings.
Read the detailed Standalone report here.
Read the detailed consolidated report here
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