L&T Finance Holdings in its fourth quarter result today reported an increase in profit after tax by around 22 percent to Rs 171 crore on year-on-year basis, the result was driven by robust loan growth and spike in other income.
The net interest income also saw a rise of 27 percent to Rs 478 crore during the quarter.
Loans expanded nearly 30 percent y-o-y to Rs 33,300 crore. Other income jumped to Rs 26 crore compared to Rs 4 crore a year back. Gross non-performing asset increased to 2.03 percent compared with 2.39 percent quarter on quarter. The net NPA ratio rose from 1.56% to 1.26% during the same period.
N Sivaraman, president & whole time director, L&T Finance Holdings, says that the company will be very cautious on the credit side in the present environment as it can't be said that everyone is out of the woods.
"Second, we would like to focus around operational project. Refinancing has a great opportunity. We like to focus on consumption side like car and other personal vehicles area where we are a small player. We like to focus and expand from 100 odd branches, we can definitely expand and service more dealers and more original equipment manufacturer (OEMs) and build our book on that segment because that has shown a very robust performance right through."
Below is the edited transcript of his interview to CNBC-TV18.
Q: Are you confident of clocking another 30 percent odd growth going forward, what is your outlook?
A: With the kind of loans that we provide from three to seven years in the corporate segment or SME segment and about 10-14 years for the infrastructure segment, we don't need the disbursement growth to achieve growth in the loan book.
Even with about 5-7 percent growth in the loan disbursements our book growth has been about 30 percent this year. So, this will be possible. Even if we end up with a very marginal growth in our disbursement as compared to last year we should see a very healthy growth in the book.
Q: When do you see investment turning around?
A: Directionally, it is already turned around as we saw that the run rate of losses is far lower than what it was in the last few quarters on a combined basis. If I look at the combination of L&T Mutual Fund and Fidelity as a simple addition compared to that we are far lower in terms of the monthly cost that we are incurring. So, consequently it will be a gradual turnaround, as the assets build up and as we get more and more of the equity and retail assets I think it is a question of time it should be a few months from now.
Q: Are you still considering applying for the banking licence and if so do you think by June end you will be able to make that application to Reserve Bank of India (RBI)?
A: If the date is July 1, then we will have to comply with that. As I said the bank is an evolution. It is not the ultimate goal, it is an evolution or the way you want to do this business, be present in financial services business. So, we will work on it definitely. We need to take into account where we are today and make sure that that transition is smooth and valuable to everyone.