L&T Finance shares took a hit, dropping 3% to reach an intra-day low of ₹140 on the NSE following the company’s announcement of a 2.2% decrease in net profit for the quarter ending December 2024, coming in at ₹626.40 crore compared to ₹640.18 crore in the same period the previous year.
Total revenue from operations for the December 2024 quarter stood at ₹4,097.58 crore, up from ₹3,533.96 crore in the corresponding previous quarter. This figure included interest income of ₹3,806.38 crore (₹3,306.30 crore).
Retail loan disbursements in Q3FY25 amounted to ₹15,210 crore, a 5% increase year-on-year. Retail loans saw a 23% growth, reaching ₹92,224 crore as of December 2024, making up 97% of the total loan book.
Managing Director and CEO of LTF, Sudipta Roy, expressed optimism despite challenges in the microfinance sector, stating, “We are hopeful that the environment will be much better over the next couple of quarters.”
Additionally, Zeenat Hamirani was appointed as the Chief Risk Officer effective January 21, 2025, replacing Amresh Kumar, as per a stock exchange filing.
Morgan Stanley, a global brokerage firm, issued an underweight rating on the stock with a target price of ₹112 per share. While Q3 profits exceeded expectations, the growth of retail AUM moderated to 23% year-on-year in the same quarter.
In response to the impact of Covid-19, the company allocated macro-prudential provisions of ₹975 crore for rural group loans and microfinance businesses in FY 21-22. Of this amount, ₹100 crore was utilized in Q3FY25, with an estimated additional utilization of ₹300-350 crore in Q4.
Morgan Stanley highlighted tepid collections in the MFI business during the December 2024 quarter.
Despite the initial dip, L&T Finance shares closed 1.06% higher on the NSE at ₹146.
Published on January 21, 2025.
