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    L&T Finance Q2 results: Net profit drops but disbursements improve

    Synopsis

    Net profit dropped to Rs 223 crore in the quarter ended September 2021 from Rs 248 crore a year ago largely due to a 12 per cent fall in interest income to Rs 2903 crore from Rs 3282 crore a year ago.

    nbfcAgencies
    Mumbai: L&T Finance Holdings (L&T Finance) the non-banking finance company of the engineering to IT group reported a 10 per cent fall in net profit year on year as its loan book shrunk even as collections and disbursements improved in the second quarter ended September 2021.

    Net profit dropped to Rs 223 crore in the quarter ended September 2021 from Rs 248 crore a year ago largely due to a 12 per cent fall in interest income to Rs 2903 crore from Rs 3282 crore a year ago.

    Interest income fell as the company's loan book shrunk an identical 12 per cent to Rs 86,936 crore from Rs 98,823 crore led by a 21 per cent fall in real estate finance and a 19 per cent fall in infrastructure finance. Compared to the first quarter ended June 2021, the loan book fell 2 per cent. To be sure, the company is refocussing its business towards rural and retail housing away from infrastructure and real estate finance.

    CEO Dinanath Dubhashi said the second wave of the Covid pandemic as well as skewed monsoon have had an impact on the business environment in the second quarter, though some businesses have seen a strong pick up in the quarter.

    "L&T Finance's rural finance business had its best-ever Q2 disbursement and witnessed normalisation in collections and disbursements," Dubhashi said adding that he expects disbursements to further pick up in the rest of the fiscal.

    In the second quarter, rural finance saw the highest ever disbursement at Rs. 4,987 crore, up 51 per cent from June 2021 leading total disbursements of Rs 7,339 crore in the quarter, led by financing for farm equipment, two-wheeler loans and microfinance.

    In real estate finance, the company is now focussing on projects at an advanced stage of construction and disbursements in new proposals undertaken only for pre-approved top developers, while in infrastructure finance the focus is refinancing operational solar projects and funding of greenfield projects.

    Collections too normalised across businesses to pre-pandemic levels led by data analytics, concerted field efforts and gradual unlocking of the economy, L&T Finance said.

    The company is carrying additional provisions and one-time restructuring provisions of Rs. 1,747 crore which is 2.22 per cent of the standard book which is over and above its gross NPA provision.

    The total gross NPA in absolute terms stood at Rs. 4,796 Cr or 5.74 per cent of loans up from 5.19 per cent a year ago but unchanged from 5.75 per cent reported in the quarter ended June 2021.

    The company had liquid assets in the form of cash, fixed deposits and other liquid investments of Rs. 13,122 crore at the end of September 2021.



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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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