L&T Finance Q4 Review – Good Set of Numbers: Prabhudas Lilladher

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Prabhudas Lilladher Report

The profits of L&T Finance Holdings Ltd. in the fourth quarter of FY22 (profit after tax of 3.4 billion rupees) exceeded our estimates (our estimate: 3.3 billion rupees) due to lower provisions.

Loan traction showed good sequential growth at Rs 883.4 billion (our estimate: Rs 904 billion) with books growth of 3.3% QoQ, but a decline of 6% YoY.

Disbursements rose sharply to 48% QoQ / 82% YoY at Rs 147.3 billion, led by consumer loans, microloans and home loans.

Asset quality improved across all segments thanks to on-the-ground collection efforts.

Overall gross Stage III was reduced to 3.80% in the fourth quarter from 5.91% in the third quarter. Net Phase III was also 2.0% with a provision coverage ratio of 48%.

In order to counter the impact of any future wave of Covid-19, the management of L&T Finance has kept additional provisions of Rs 17.2 billion (2.10% of standard assets) to be released gradually over the next quarters.

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