Comments
L&T Finance Holdings reported a 73 per cent drop in consolidated net profit for the first quarter of the fiscal on the back of higher provisions.
For the quarter ended June 30, it posted a net profit of ₹148 crore against ₹549 crore a year ago.
“Adjusted for incremental provisions, the profit after tax for the first quarter stood at ₹580 crore,” it said in a statement on Thursday, adding that profitability for the quarter was largely impacted due to interest cost on enhanced liquidity, lower fee income and, most importantly, incremental provisions taken to strengthen the balance sheet against the after effect of the pandemic.
“Incremental provisions of ₹577 crore in the first quarter of the fiscal to strengthen balance sheet. Credit cost in the first quarter is shown at ₹896 crore versus ₹595 crore a year ago,” it said, adding that the Covid-19 provision was ₹277 crore in the first quarter this fiscal.
Its total lending book de-grew by one per cent to ₹98,879 crore in the first quarter of the fiscal. Total income declined by 7.9 per cent to ₹3,397.53 crore in the first quarter against ₹3,689.50 crore.
Dinanath Dubhashi, Managing Director and CEO, LTFH, said: “The results of this quarter should be seen less as a quarterly result and more from the viewpoint of fortifying the company from any challenges arising in post-Covid scenario.”
He further said the company focussed on restoring the collection rhythm and maintaining the asset quality, especially through on-field customer outreach in non-containment zones.
It also reported a sharp drop in the number of borrowers who opted for the moratorium in the first quarter of the fiscal against the fourth quarter. “Considerable reduction in portfolio under moratorium for retail products from 79 per cent in March 2020 to 44 per cent in June 2020,” it said.
It further said that it expects retail disbursements to accelerate in the second quarter of the fiscal, while those in infrastructure and real estate will depend upon the growth in the sector.
It also reported faster-than-expected recovery in rural segments, with a 19 per cent year-on-year increase in farm equipment units financed during June.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.