Farm equipment finance witnessed 130 per cent growth at Rs 1,357 crore as against Rs 590 crore in the year-ago period.
Farm equipment finance witnessed 130 per cent growth at Rs 1,357 crore as against Rs 590 crore in the year-ago period.

L&T Finance Holdings on Friday reported 20 per cent rise in net profit at Rs 178 crore for quarter ended June, mainly driven by rural demand for farm equipment.

The non-banking financial company had registered Rs 148 crore profit in the year-ago period.

LTFH said COVID-related partial lockdowns in April and May had an impact on few businesses during the quarter under review.

However, with gradual unlocking of the economy from June, the disbursements bounced back led by faster pick-up in economic activity across farm equipment finance, two-wheeler finance, consumer loans and infrastructure finance.

Due to slower industry pick-up, the micro loans, housing and real estate business saw moderate uptick in collections and disbursements, it said.

Farm equipment finance witnessed 130 per cent growth at Rs 1,357 crore as against Rs 590 crore in the year-ago period.

Infrastructure finance showed robust disbursement momentum post unlock and continued sell-down with Rs 1,480 crore disbursed in the quarter.

The business continues to see robust performance backed by higher sell-down volumes and refinancing, it added.

The company's gross non-performing assets (NPAs) rose a tad to 5.75 per cent during the quarter as against 5.24 per cent in the year- ago period.

Net NPAs rose to 2.07 per cent from 1.71 per cent.

From 2018-19, LTFH started building macro-prudential provisions for any unanticipated future events which held the company in good stead.

Continuing this focus, as a prudent measure LTFH created additional provisions of Rs 369 crore in the quarter under review. With this, it is carrying total additional provisions of Rs 1,403 crore (1.75 per cent of standard book), it said.

These provisions are over and above the expected credit losses on NPA and standard asset provisions.

"Despite severe impact of COVID 2.0, the learnings from COVID 1.0 held us in good stead in managing short-term challenges and helped maximise positive impact on business metrics.

"Our Q1FY22 performance reflects the fact that the company has built a sustainable business model, one which will enable it to grow in the medium to long-term while dealing with any short-term challenges (including impact of COVID 2.0)," LTFH Managing Director & CEO Dinanath Dubhashi said.

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