More Stories

Informist, Friday, Jul. 18, 2025

 

Please click here to read all liners published on this story

--L&T Finance Apr-Jun consol net profit INR 7.01 bln 
--Analysts saw L&T Finance Apr-Jun consol net profit INR 6.84 bln 
--L&T Finance Apr-Jun consol net profit INR 7.01 bln vs INR 6.86 bln yr ago 
--L&T Finance Apr-Jun consol revenue INR 42.60 bln vs INR 37.84 bln year ago
--L&T Finance gross stage-3 asset ratio 3.31% Jun 30 vs 3.29% qtr ago 
--L&T Finance net stage-3 asset ratio 0.99% Jun 30 vs 0.97% qtr ago 
--L&T Finance Apr-Jun consol book size INR 1.023 tln, up 15% on year 
--L&T Finance Apr-Jun retail book INR 998.16 bln, up 18% on year 
--L&T Finance Apr-Jun NIM 8.24% vs 8.15% quarter ago, 9.31% year ago 
--L&T Finance: Provision coverage ratio at 71% as on Jun 30 
--L&T Finance Apr-Jun retail disbursements INR 175.22 bln vs INR 148.39 bln 
--L&T Finance: Rural business book INR 266.16 bln as on Jun 30, up 3% YoY 
--L&T Finance: Farmer finance book INR 157.56 bln as on Jun 30, up 11% YoY 
--L&T Finance: Two-wheeler book INR 123.31 bln as on Jun 30, up 3% YoY 
--L&T Finance: Personal loans book INR 93.83 bln as on Jun 30, up 41% YoY 
--L&T Finance: SME Finance book INR 69.64 bln as on Jun 30, up 56% YoY
--L&T Fin Apr-Jun rural business disbursements INR 56.18 bln, down 3% YoY
--L&T Fin Apr-Jun farmer finance disbursements INR 22 bln, up 16% on year 
--L&T Fin Apr-Jun 2-wheeler finance disbursements INR 21.28 bln, dn 19% YoY
--L&T Fin Apr-Jun personal loan disbursements INR 19.42 bln, up 65% YoY 
--L&T Fin Apr-Jun SME finance disbursements INR 12.73 bln, up 30% YoY

 

By Aaryan Khanna

 

NEW DELHI – The net profit of L&T Finance Ltd. in the June quarter rose 2.3% on year to INR 7.01 billion, expanding 10.2% sequentially. While expense growth outstripped the pace of increase in the topline, the absolute rise moved largely in tandem from the year-ago period.

 

This helped the non-banking financier beat analyst estimates of the net profit being INR 6.84 billion in the June quarter. Analysts had said the bottom line would remain flat compared to a year ago, as the gains from growth in assets under management may be offset by weakness in the microfinance portfolio. 

 

The expectations were mirrored in the company's earnings. Interest income grew 13.4% on year to INR 39.15 billion, even as total income growth was slower. Total income rose 12.6% to INR 42.60 billion in Apr-Jun. An 11?ll in fees and commission income reduced the non-banking finance company's revenue by over INR 300 million from a year ago.

 

However, impairment of financial instruments jumped 39% on year to INR 5.42 billion in the June quarter, but was up only 3.6% from the previous quarter, likely due to the stress in the microfinance sector since the middle of 2024-25 (Apr-Mar). Finance costs also rose at a quicker pace than interest income, rising 21% on year to INR 16.36 billion. Consequently, total expenses were up 15.9% at INR 33.16 billion.

 

The consolidated book rose 15% on year to INR 1.02 trillion, of which retail loans were at INR 998.16 billion, up 18% on year and 5% on quarter. This is part of L&T Finance's pivot away from wholesale loans, which made up over half of the portfolio at the end of FY20. Now, wholesale loans make up only 2% of the book, with the rest being retail loans. 

 

Retail disbursements rose 18% both on year and on quarter to INR 175.22 billion. The increase included the INR-13.35-billion gold loan portfolio bought from Paul Merchants Finance during the quarter. This made up nearly the entirety of the gold loan book, which stood at INR 15.30 billion at the end of June.

 

The rural business book was the largest segment for the diversified NBFC, with assets under management of INR 266.16 billion as of Jun. 30, up 3% on year. Disbursements in the segment fell 3% on year to INR 56.18 billion in the reporting quarter, but were up 10% on quarter due to improving collection efficiency, the lender said.

 

The two-wheeler loan book also saw a sluggish growth at 3% on year to INR 123.31 billion as of Jun. 30. Disbursements shrank 19% on year to INR 21.28 billion.

 

The farmer finance book was the largest secured business portfolio, and was up 11% on year at INR 157.56 billion. Disbursements for farmer finance were up 16% on year to INR 22.00 billion.

 

The book size for personal loans grew 41% on year to INR 93.83 billion. Personal loans disbursement grew 65% to INR 19.42 billion on the back of "Big Tech Partnerships", the company said in its investor presentation.

 

Meanwhile, outstanding loans to finance small and medium enterprises stood at INR 69.64 billion at the end of June, up 56% on year. Disbursements were up 30% on year at INR 12.73 billion.

 

The lender's net interest margin expanded sequentially to 8.24% in the June quarter from 8.15% the previous quarter. However, margins shrank sharply from the 9.31% recorded in Apr-Jun a year ago. The consolidated credit cost, including macro-prudential provisions, was 2.23% in the June quarter against 2.54% a quarter ago.

 

Asset quality in the consolidated portfolio was largely unchanged from March. The NBFC's gross stage-3 asset ratio was at 3.31% at June-end, up 2 basis points on quarter. Net stage-III asset ratio stood at 0.99%, against 0.97% on Mar. 31. The provision coverage ratio stood at 71% at June-end, unchanged from a quarter ago.

 

Earlier Friday, S&P Global Ratings and Fitch Ratings both assigned a long-term issuer rating of 'BBB-' to the diversified financier. S&P had a positive outlook on the long-term rating, and also assigned the lender a short-term issuer rating of 'A-3'. Fitch's outlook on the long-term issuer default rating was stable. L&T Finance is among the 10 largest shadow banks in India and has been classified as an NBFC-Upper Layer by the Reserve Bank of India. On Friday, shares of L&T Finance ended 1.7% higher at INR 203.15 on the National Stock Exchange. The company declared its earnings after market hours.  End