L&T Finance Holding today reported a tepid 7 per cent growth in consolidated net profit at Rs 187 crore despite a 20 per cent rise in advances, as finance cost jumped 50 per cent.
Had it not been for the high cost of funding, the net profit would have grown 47 per cent to Rs 414 crore, group president and whole-time director N Sivaraman told PTI.
Higher advances helped the company improve its net interest margins by 30 bps to 5.6 per cent at the end of the reporting fiscal.
For the full year, net profit, excluding interest cost rose 23 per cent to Rs 1,406 crore, he added.
"Consolidated post-tax net was impacted by higher credit cost compared to previous year, which rose by a hefty 50 per cent," Sivaraman said.
For the full year the consolidated PAT (excluding exceptional items) grew by 7 per cent to Rs 597 crore and for the quarter it grew by 7 per cent to Rs 187 crore, he added.
"The slowdown in the economy continues to put pressure on the asset quality. Gross NPAs stood at 3.18 per cent at Rs 1,243 croee compared to 2.93 per cent at Rs 1,065 crore," he said, adding most of the stressed assets came from the Citi Financial portfolio, which the company had bought for Rs 700 crore recently.
Net NPAs rose to 2.29 per cent at Rs 890 crore from 2.05 per cent in the December quarter at Rs 740 crore. The company has made a provision of Rs 195 crore over and above RBI norms.
However, he expects the asset quality to improve going forward as there was only a negligible spike in fresh slippages. (More) PTI BEN KRK MR 04232059
Sivaraman attributed the improvement in advances to the conscious focus on the rural finance, personal vehicle finance and housing finance segments in retail business, while pursuing operational assets in the wholesale business.
Its AMC business grew by 63 per cent to Rs 18,255 crore, while the wealth management business achieved average assets under service of Rs 5,012 crore.
Commenting on the numbers, chairman and managing director Y M Deosthalee said, "While credit costs remain elevated due to the challenging macro environment, containing the stress and building a quality portfolio has been a key focus for the management team.
"Post acquisition of FamilyCredit and Indo-Pacific Housing Finance, there are plenty of opportunities to expand our presence in retail and rural markets."
He further said the company