Conference Call with L&T; Finance Management and Analysts on Q2FY25 Performance and Outlook. Listen to the full earnings transcript.
Holding company L&T; Finance announced Q2FY25 results Financial Highlights: PAT at Rs 696 crore vs. Rs 595 crore, up 17% YoY. Maintained Net Interest Margins (NIMs) + Fees stable at 10.86%. Consol. book size at Rs 93,015 crore vs. Rs 78,734 crore, up 18% YoY. Return on Assets (RoA) improved to 2.60%, up from 2.42%, representing an increase of 18 basis points (bps) YoY. Return on Equity (RoE) stood at 11.65% vs. 10.81%, up 84 bps YoY. Other Highlights: Retailisation at 96% of overall book. Return on Assets (RoA) improved to 2.60%, up from 2.42%, representing an increase of 18 basis points (bps) YoY. Retail book stood at Rs 88,975 crore, up from Rs 69,417 crore, reflecting a YoY growth of 28%. Robust consolidated asset quality: Gross Stage 3 (GS3) stood at 3.19% in Q2FY25 vs 3.27% in Q2FY24. Net Stage 3 (NS3) stood at 0.96% in Q2FY25 vs 0.82% in Q2FY24. Credit cost remains stable at 2.59% YoY even in a volatile and challenging macro environment. Proactive asset-liability management resulted in a Weighted Average Cost of Borrowing (WACB) reducing by 5 bps to 7.80% Quarter-on-Quarter (QoQ). The robust business model coupled with strong growth across diversified retail segments led to an increase in quarterly retail disbursements reaching Rs15,092 crore, thereby reflecting a 12% YoY growth. Maintained best-in-class collection efficiency of 99.45% for Q2FY25 in Rural Business Finance on the back of concerted collection efforts along with efficient sourcing and portfolio monitoring guardrails Sudipta Roy, Managing Director & CEO, LTF said: “Our Company has been able to demonstrate sustainable growth and profits through proactive portfolio management and persistent collection strategies. The second quarter of the current financial year has been challenging on account of multiple sectoral headwinds and a volatile macro environment. Looking ahead, we expect that the sectoral challenges may persist for the next two quarters and apropos to the same, we may dynamically recalibrate our business objectives in the coming quarters, prioritizing positive credit outcome over assets under management growth. Our next gen credit underwriting engine, ‘Project Cyclops’, which was operationalized in the quarter ended September 30, 2024 in our two-wheeler finance product is expected to be leveraged for our other major products through the course of second half of the current fiscal. We expect this to be a strategic differentiator in the financial services ecosystem. Digitally-enabled acquisition engines would be scaled up through big-tech partnerships to ensure low-cost acquisition while maintaining superior credit quality. We remain optimistic about our go-forward strategy and despite ongoing sectoral challenges, we remain focused on our overall transformation agenda and granular execution towards the same continues unabated.” Result PDF