Despite several headwinds that impacted the NBFC segment, L&T Finance has managed to post a decent growth in profits at ₹560 crore, up 18.4 per cent, in the second quarter of fiscal 2019 against ₹538 crore in the first quarter. 

However, the company’s profit increased 67 per cent from ₹338 crore in the year ago period.   

The company said it was comfortably placed with respect to both liquidity and interest-rate risks due to its robust ALM, strong risk-management framework, and proactive actions.

Net income stood at ₹3,246.30 crore in the September quarter against ₹2,383.82 crore in the year-ago period.

Dinanath Dubhashi, Managing Director & CEO, L&T Finance, said: “Enabled by the strength of our business model and a robust risk-management framework, we have overcome multiple headwinds during the past two years. Our prudent asset-liability management has ensured that our average borrowing cost is well in control despite hardening of interest rates. This is the second quarter where we have delivered top quartile RoE, and have continued on our path of responsible growth. Additionally, over the last two years, we have successfully steered our portfolio towards ‘retailisation’, with a rapid increase in our rural and housing loan book.”

Even though the quarter saw some major headwinds such as Kerala floods, rising interest rates and IL&FS crisis, L&T continued to grow its lending businesses in rural, housing and wholesale, with a 26 per cent year-on-year increase in assets in Q2 FY19.

Average Assets under Management (AAUM) in Investment Management business increased by 40 per cent at ₹73,754 crore in Q2 FY19 from ₹52,749 crore in Q2 FY18 through monitored early warning signals, concentration on early bucket collections and strong Stage 3 resolution efforts. LTFH’s provision coverage has also increased during this time, indicating the strength of its portfolio.

(This news report has been corrected for factual error.)

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