L&T Finance Holding Ltd (LTFH) – Q3FY13 result :: India Nivesh

L&T Finance Holding Ltd (LTFH) – Q3FY13 result update
Healthy loan growth has come in at a cost of Asset quality….
Stretched valuation leaves limited upside… maintain HOLD with
target price of Rs 81 ….
 LTFH’s loan book growth remains robust at 31% yoy (13% qoq). L&T infra
finance (LTIF) registered a higher loan growth comparatively at 48% yoy (10%
qoq) while L&T Finance (LTF) of 29% yoy (14% qoq). Disbursements grew by
22% yoy to Rs 66.6 bn backed by healthy disbursals in LTIF.
 Asset quality (cons) deteriorated with increase of 58 / 32 bps qoq in Gross /
Net NPA to 2.4% / 1.6%. LTIF’s Gross / Net NPA increased by 29 / 23 bps qoq
to 1.8% / 1.6% and LTF by 47 / 58 bps qoq to 2.1% / 1.6%.
 NIMs (cons) surprised negatively with decline of 12 bps qoq to 5.3% mainly
due to higher decline in yields as against cost of funds. NII (cons) was ahead
of expectation at Rs 3.8 bn, increase of 25% yoy.
 Net profit jumped by 215% yoy to Rs 2.9 bn due to one off (sell of investment
in federal bank), however adjusted net profit growth was lower than
expected at 27% yoy.
Result Highlights:
Loan growth intact, disbursements picked up:
Consolidated loan book grew by 31% yoy (13% qoq) to Rs 312 bn aided by LTIF’s
loan growth of 32% yoy (10% qoq) to Rs 133 bn and LTF of 29% yoy (14% qoq) to Rs
177 bn. Jump in LTF’s loan book is due to acquisition of FamilyCredit with asset size
of Rs 13.4 bn. Disbursements (cons) grew by 22% yoy to Rs 67 bn due to healthy
disbursals in LTIF’s of 68% yoy to Rs 22.7 bn while disbursals in LTF remains muted
at 17% yoy to Rs 43.5 bn. 64% of LTIF’s loan book is under project loan and of which
over 34% are operational. Growth in LTF (retail financing franchise) loan book was
attributed to 1) 12% qoq increase in both capital market products and rural product
and 2) addition of FamilyCredit’s loan book.

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