The shares of L&T Finance Holdings tumbled over 5 per cent on Monday amid weak internals reported by the company during its first-quarter results on Friday, wherein Gross NPA increased almost 6 per cent on a year-on-year basis, while AUM (Assets Under Management) fell by over 10 per cent YoY.

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On improvement in margins and fees, the company reported a 20 per cent rise in the profit on YoY basis to Rs 178 crore in the first quarter of the financial year 2021-2022, as compared to Rs 148 crore in the same period a year ago.

Its net interest margin (NIM) plus fees improved to 7.52 per cent in the June-ended quarter of FY22 from 5.78 per cent a year ago on a consolidated basis, while it fell from 8.17 per cent on a sequential basis.

The GNPA rose to 5.75 per cent in June 2021 from 5.24 percent a year ago and 4.97 per cent in March 2021, while net NPAs were at 2.07 per cent in June 2021, up from 1.71 per cent in June 2020 and 1.57 per cent in March 2021.

In a management commentary, L&T Finance Holdings Managing Director & CEO Dinanath Dubhashi said, despite severe impact of Covid 2.0, the learnings from Covid 1.0, helped in managing short-term challenges and maximise positive impact on business metrics.

Maintaining a Buy call on L&T Finance, Goldman Sachs expects the company to diversify towards higher return generating retail business over the long term. L&T Finance saw marginal operating miss, however, disbursements bounced back in the June quarter. It sets a price target of Rs 128 per share.

The counter at around 3:00 pm has been trading at 4.69 per cent lower to Rs 90.40 per share, which is a day’s low level, on the BSE as against 1.14 per cent decline in the S&P BSE Sensex.