L&T Finance Q4 net up 24% to Rs 174 crore on NIM expansion
L&T Finance Holdings Thursday posted a 23.8 percent growth in consolidated net profit, excluding exceptional items, at Rs 174.1 crore in the fourth quarter ended March 31 on the back of rise in net interest margin.
Mumbai: L&T Finance Holdings Thursday posted a 23.8 percent growth in consolidated net profit, excluding exceptional items, at Rs 174.1 crore in the fourth quarter ended March 31 on the back of rise in net interest margin.
The diversified financial company of EPC major L&T had registered a post-tax profit of Rs 140.7 crore in the corresponding period of last year.
L&T Finance President N Sivaraman attributed the rise in profit to an expansion in net interest margin (NIM) to 6.51 percent in retail and corporate finance business from the quarter ago's 5.83 percent and reduction in operating costs.
The firm's loan and advances increased by 30 percent to Rs 33,000 crore in the period under review, while the core interest income rose 30.4 percent to Rs 651.1 crore.
Net profit for its lending businesses - retail and corporate finance - and infrastructure finance grew 29 percent to Rs 603.1 crore during the fourth quarter.
Gross non-performing assets ratio for the retail and corporate finance increased to 2.50 percent from 2.05 percent in the previous quarter because of the acquisition of Family Credit, which it has provided fully for, it said.
About future growth, the company said "credible and stable" signs of improvement in business environment are yet to show up and added that it expects some pick up in loan demand only in the second half as capex increases.
Losses from the investment management business widened to Rs 15.8 crore from the year ago's 8.6 crore, L&T Finance Chairman Y M Deosthalee said, attributing it to a commission of Rs 7 crore on a fixed maturity plan scheme of its mutual fund arm and Rs 7 crore invested in re-branding the business acquired from Fidelity.
Its average assets under management stood at Rs 11,000 crore during Q4, Deosthalee said. He sounded confident that the worst is over for the asset management business and said he expects it to break-even sometime this fiscal (FY14).
The company's housing finance business, which it entered by way of acquisition of Family Credit in 2012, also reported losses of Rs 90 lakh during the reporting quarter.
Deosthalee said L&T Finance has touched a portfolio of over Rs 2,000 crore in its wealth management businesses, and asserted that the company, which did four acquisitions in FY13, is not looking to buy a wealth management business.
He declined to comment on the NBFC's interest to enter the banking fray, saying the company is awaiting clarifications from RBI on its final guidelines on banking licences issued in February.
The company scrip gained 0.32 percent to close at Rs 79.55 apiece on the BSE, whose 30-share benchmark ended the session with a 1.19 percent gain.