PBT at Rs. 357 Cr, up 50% YoY and PAT at Rs. 262 Cr, up 47% YoY
Accelerated retailisation momentum powered by Fintech @ scale: Maintained strong business
momentum backed by digitization and leveraging power of data in addition to inherent business
o Highest-ever quarterly retail disbursements at ~Rs. 8,938 Cr, up 10% QoQ and 148%
YoY – Strong disbursement momentum surpassing Q4FY22
o Retail portfolio mix at 54% (up from 45% in Q1FY22); increase in retail book by 6%
QoQ and 19% YoY – in line with Lakshya 2026 strategic plan
o Normalized collections rhythm with robust performance across businesses
o Powering up with Digital technology and new products to support future growth:
Continued scale-up of end-to-end digital products Disbursements of Rs. 1,010 Cr in
Consumer Loans, up by 26% QoQ; Steady uptick in SME Loans – Pilot launched in
Q3FY22 and book size of Rs. 126 Cr till Q1FY23
Continued performance on business levers:
o Achieved highest-ever NIM + Fees of 8.23% in Q1FY23, up 71bps YoY
o Lowest-ever WAC at 7.27%, even in a phase of increasing interest rate regime
o GS3 at 4.08% in Q1FY23; PCR at 55%; NS3 at 1.87%. Adequate additional provisions
of Rs. 1,450 Cr (1.73% of standard assets) over and above GS3 and ECL provisions
Poised for medium to long-term growth with:
o Strengthened balance sheet – Capital adequacy at 23.12% (Tier 1: 19.98%)
o D/E ratio at 4.05x in Q1FY23
Rated AAA by CRISIL, ICRA, CARE and India Ratings
The Board of L&T Finance Holdings (LTFH) Ltd., a leading Non-Banking Financial Company
(NBFC), today announced the financial results for the first quarter ended June 30, 2022. LTFH being
a Core Investment Company (CIC), carries out its businesses through its wholly owned subsidiaries.
LTFH is among the market leaders in Farm Equipment finance, Two-Wheeler finance, as well as Rural
Business Finance (erstwhile Micro Loans) and continues to be one of the leading players in financing
infrastructure sectors like renewables and roads. With a sustainable business model, data analytics
led collection and disbursements, and a sharp focus on asset quality, the Company remains
committed to building a stable and sustainable organization for all its stakeholders.
Commenting on the financial results Mr. Dinanath Dubhashi, Managing Director & CEO, L&T
Finance Holdings, said, “LTFH’s results in Q1FY23, apart from highlighting our business strengths
also reflects our continuing focus on our stated strategy of accelerated retailisation. Retail
disbursements are at an all-time high. Our retail portfolio mix has reached 54%, and our chosen ‘Right
to Win’ market leading products are on firm ground owing to sustained focus on our business
strengths as well as deep integration of data analytics in the decision-making process, while
disbursing, servicing and collecting loans, across the customer life cycle. We have disbursed at a
monthly run rate of ~ Rs. 1,300 Cr in the Rural Business Loans segment, while hitting new milestones
in Consumer Loans and Home Loans.”
The Company witnessed continued improvement in disbursements and collections in Q1FY23. LTFH
continued to focus on stated business levers of maintaining prudent liquidity, strengthening the
balance sheet, following a data analytics-based collections approach, and rigorous adherence to
collection led disbursement strategy. This is reflected in the traction in our retail businesses and the
pace of retailisation. The Company’s retail portfolio mix now stands at 54% (up from 45% in Q1FY22),
in line with the stated strategic objective. This, coupled with a strengthened balance sheet, stable
asset quality and adequate additional provisioning for OTR-related impact in the future (if any),
positions the company for solid growth in retail businesses.
A. Fintech @ Scale: LTFH is on its path to becoming a ‘customer’ focused company from a
‘product’ focused one, in line with the Lakshya 2026 plan. During the quarter, the Company
continued to emphasize on customer facing applications, with a clear focus on expanding the
existing channels and ecosystems, and creating newer channels.
a. PLANET app – The launch of the customer facing application – PLANET – which was soft-
launched in Q4FY22 has shown encouraging results with close to 2 lakh downloads. The
application, which currently provides onboarding and servicing options for customers is
available on both Appstore and Playstore.
b. WhatsApp for Business: Another key development has been the launch of the WhatsApp
channel for Consumer Loan customers. In addition to the already existing WhatsApp Bot
functioning as a servicing channel, we have now launched a WhatsApp channel for our
partners where customers can apply for loans anywhere between Rs. 50,000 to Rs. 5,00,000
through the application with a TAT of 15 minutes.
c. Leveraging data analytics for customer retention: The company is actively working
towards monetization of its 7 crores plus customer database including existing and past
borrowers, co-borrowers, guarantors, prospects and reference to enhance its cross-sell
reach. At present, the 50% of company’s disbursements in Rural Business Finance and 25%
in Farmer Finance are driven by cross-sell offers generated by the company. Our Consumer
Loans book of Rs. 3,027 Cr has been largely driven by loans to our retail loyalty customer
base. In addition to this, based on data analysis, the company is also working on identifying
and addressing pockets of currently untapped potential across customer segments and will be
launching additional products in the next couple of quarters.
B. Disbursements: In Q1FY23, retail businesses witnessed robust disbursement momentum. Retail
Finance saw the highest ever quarterly disbursement at Rs. 8,938 Cr, up 10% QoQ and 148%
YoY, with total disbursements in the quarter for focused businesses reaching ~Rs. 10,500 Cr.
Retail book grew by 19% YoY, on the back of highest ever disbursements.
a. Rural Business Finance (erstwhile Micro Loans): The Rural Business Finance business,
which enables micro-entrepreneurship ecosystems at the grassroots level continued to witness
strong momentum in disbursements with monthly run rate reaching levels of ~Rs. 1,300 Cr during
the quarter (total disbursements at Rs. 3,811 Cr), while the book grew by 27% YoY. The Company
continues to deepen channel presence and further geo-diversification will lead to future growth.
b. Farmer Finance (erstwhile Farm Equipment Finance): The Farm Equipment Finance
business showcased robust performance with strong disbursements of Rs. 1,532 Cr, up by ~33%
QoQ and 13% YoY by focusing on preferred dealer / OEM strategy, enhanced customer service and
dominating counter share. The Company maintained its market share while financing ~33,000
tractors in the quarter, which is the highest ever quarterly disbursement, in terms of number of
c. Urban Finance:
o Consumer Loans: LTFH continued to grow its first ‘digital native’ Consumer Loans business,
achieving disbursements of Rs. 1,010 Cr in Q1FY23 (up 26% QoQ). Additionally, the
business continues to build a significant scale by cross-selling to LTFH’s existing as well as to
open market customers.
o Two-Wheeler Finance: The business saw the highest Q1 disbursements in the quarter (Rs.
1,517 Cr. in Q1FY23, up 84% YoY), despite a market slowdown in June. By maintaining a
strong focus on customer value and building preferred dealer / OEM relationships to grow
market share, the business is delivering on a strategy built around dominating counter share
of preferred partners and offering mutual value by leveraging the increased application of data
o Retail Housing (Home Loans & LAP): The Retail Housing Finance business continued to
deliver strongly quarter on quarter performance, with disbursements at Rs. 936 Cr, led by a
significant uptick from our revamped offerings and sourcing through select market channels.
Additionally, the interest rate regime has made our offerings comparative to peers, which
along with solid DSA relationships is translating into enhanced business growth.
d. Small and Medium Enterprise Loans (SME): In addition to existing products and to further
accelerate retailisation, LTFH undertook a pilot launch of SME loans in Q3FY22, with end-to-end
digital journey and use of analytics to deliver value-added proposition for customers and
channels. During the pilot, the business recorded a steady uptick with disbursements of Rs. 130
Cr till Q1FY23 and is now ready for a scale up.
Retail businesses established as a sustainable proposition with market leading # positions in
Ranked No. 1 in Farm Equipment Finance
Amongst Top 5 in Two-Wheeler Finance
Ranked No. 4 in Rural Business Finance & Micro Finance
a. Infrastructure Finance: During the quarter, continuing with the stated strategy of the asset-light
model, the disbursements stood at ~Rs.1,400 Cr, with focus on refinancing opportunities for
operational projects in core sectors – roads and renewable energy.
b. Real Estate Finance (RE): This quarter too, disbursements were only towards project
completion, in line with our Lakshya 2026 strategy.
C. Collections: LTFH witnessed normalized collection efficiency (CE) in Q1FY23, across
businesses, with retail businesses reporting steady state pre-covid collection volumes. This was
led by the Company’s concerted on-field efforts, analytics led prioritization and use of propensity-
based data analytics to channelize resources.
Retail Businesses: The portfolio focus continued towards boosting 0 DPD collections and managing
early bucket delinquencies.
a. Rural Business Finance: Regular CE maintained at ~99.6% in Q1FY23 (vs. 90% in Q1FY22)
with continuous improvement in On Due Date collections on account of consistent on-ground
efforts and management of early bucket delinquencies.
b. Farmer Finance: Crossed CD CE of 90% in Q1FY23, despite the cyclical effect seen in this
segment. Best ever April and May CD CE with efforts concentrated around on-ground collections.
c. Urban Finance:
o Two-Wheeler Finance: Maintained better than industry regular CE at 98.7%, restricting flow
forward in delinquent bucket. Reduction in bounce rates owing to concentrated call centre /
analytics driven pre-delinquency management efforts.
o Consumer Loans: Maintaining portfolio performance with regular CE at ~ 99.2% during the
quarter with focus on arresting early delinquencies.
o Home Loans/LAP: Regular CE continued to be over 99% owing to strong focus on reducing
bounces and call centre retention to control roll forwards.
Wholesale Businesses: Collections in the wholesale portfolio continued as per plan, with YoY
reduction in wholesale book by Rs. 5,868 Cr
a. Infrastructure Finance: Timely repayments as well as pre-payments resulted in prepayment
volumes of Rs.1,613 Cr in Q1FY23 and reduction in the book by Rs. 3,304 Cr on YoY basis. Our
focus will be on maintaining our strong position in renewables and roads, while maintaining an
asset light model.
b. Real Estate Finance: The Real Estate Finance book, in line with business objectives, registered
a significant reduction of Rs. 2,563 Cr in the last 12 months, on the back of continued focus on
project completion and rigorous monitoring along with resolutions.
D. Liability Management: With the overall rise in market interest rates, the Company continued the
policy of locking-in adequate long-term borrowings at lower rates with the intent of remaining well-
protected from expected liquidity tightening and potential rate increase in interest rates in the
Lowest ever quarterly WAC at 7.27%. Reduction by 37 bps YoY and 7 bps QoQ
Raised incremental long-term funding of Rs. 1,135 Cr (of which, PSL funding is Rs. 635 Cr) in
NIM + Fees up at 8.23 % (up 71 bps YoY), on back of highest quarterly retail disbursements
LTFH and all its lending subsidiaries have long-term ratings of ‘AAA’ (Stable Outlook) by all four
credit rating agencies: LTFH and LTF rated by CRISIL (Mar-22), CARE (Sep-21), India Ratings (Apr-
22) and ICRA (Aug-21). LTICL rated by CRISIL (Mar-22), CARE (Sep-21) and ICRA (Sep-21).
D. Balance Sheet Strength: At the end of the quarter, GS3 in absolute terms stood at Rs. 3,559 Cr.
Reduction in overall GS3 to 4.08% in Q1FY23 on EAD basis from 6.67% in Q1FY22 with NS3 at
1.87% and PCR at 55%.
Rs. Cr* Q1FY22 Q4FY22 Q1FY23
Gross Stage 3 5,796 3,543 3,559
Net Stage 3 1,879 1,678 1,591
Gross Stage 3 % 6.67% 4.08% 4.08%
Net Stage 3 % 2.26% 1.98% 1.87%
prudent measure, LTFH continues to carry additional provisions of Rs. 1,450 Cr (Macro, enhanced and
OTR provisions) corresponding to 1.73% of standard book in addition to GS3 provisions and ECL on
standard assets. This is to counter OTR-related impact in future (if any), on account of Covid 2.0. With
the existing collection momentum in OTR pool, the Company remains confident that current provisions
will be sufficient to counter any future stresses related to OTR accounts. Overall capital adequacy was
23.12% (Tier 1: 19.98%) and D/E stood at 4.05x in Q1FY23.
E. Asset Mix: Retail assets contributed to 54% of portfolio mix in Q1FY23 as against 45% in
Q1FY22. The retail book saw a growth of 19% YoY and the Focused Book stood at Rs. 87,589
Cr in Q1FY23.
Rs. Cr Q1FY22 Q4FY22 Q1FY23 Book Growth
Retail Businesses 40,096 45,084 47,794 6%
Wholesale Businesses 45,663 41,731 39,795 -5%
Total Focused Book 85,758 86,815 87,589 1%
Defocused 2,682 1,526 489 -68%
Total Lending Book 88,440 88,341 88,078 0%
The 6% QoQ growth in retail book is well in line with the Company’s Lakshya 2026 target of 25% retail
In the Investment Management business, the overall average AUM stood at Rs. 71,571 Cr as of
Q1FY23, mirroring the fall in the broader market during the quarter.
F. ESG/CSR Initiatives:
ESG: Building a Collective Sustainable Future – LTFH is committed to its ESG responsibilities
and accepts that it is the only way to be a sustainable organization as well as create value for its
stakeholders. LTFH launched its First Integrated Report during the quarter. With 22
sustainability targets adopted in FY23, the Company follows reporting of all ‘essential indicators’
under BRSR, 1 year in advance of applicability.
CSR:The Company’s CSR outreach extended to 250+ villages across the country in Q1FY23
along with reaching out to 2,17,000+ community members for creating awareness on financial
literacy and the importance of Covid-19 vaccination. LTFH also entered into a partnership with
Access Livelihoods Foundation to kickstart the Company’s flagship CSR project – Digital Sakhi
project in Karnataka and Kerala, this quarter.
G. Financial Performance Summary: Uptick in financial performance in Q1FY23 led by ongoing
realisation strategy plan powered by fintech @ scale:
o Highest-ever quarterly retail disbursements at Rs. 8,938 Cr, up 10% QoQ
o Retail portfolio mix at 54% (up from 45% in Q1FY22) with over 19% YoY increase in retail
o Increase in NIM+ Fees to 8.23% (up 71bps YoY) on the back of highest quarterly retail
o Increase in PAT to Rs. 262 Cr, up 47% YoY
o Lowest ever WAC at 7.27% with reduction in quarterly WAC by 37 bps YoY
o GS3 at 4.08% in Q1FY23; PCR at 55%; NS3 at 1.87%. Significant YoY asset quality
improvement across businesses
Mr. Dubhashi further added, “Over the past five years, LTFH has been able to attain market-leading
positions in Rural Businesses by embedding data and analytics-based business rule engines within
our customer offerings, which has served us well during the pandemic. The Company is now focused
and is confident of building the same value proposition for our urban businesses, based on our strong
digital and analytical abilities, allowing us to identify and address customer needs across the
customer lifecycle through our product offerings.
The continued upswing in existing products and increased traction in new products bodes well in our
journey to become a top-class, retail finance company with over 80% retail book by 2026. As we
move forward on this path, the other four growth initiatives of cross-sell and up-sell to our existing
good customers, geo expansion, digital and channel extension and launch of new products will play
an increasingly larger role. We are confident that, from here on, our sharp ‘customer first’ approach
will be evident in all our initiatives.”