Results - Analysis
Retail loan book up 19%
L&T Finance has recorded 15% increase in net profit to Rs 636.17 crore in the quarter ended March 2025 (Q4FY2025). The consolidated income from operations increased 13% to Rs 3749.88 crore for the quarter ended March 2025, while other income of the company declined 21% to Rs 277.34 crore. The total income increased 10% to Rs 4027.22 crore for Q4FY2025.
Interest expenses increased 20% to Rs 1599.83 crore. Operating expenses rose 1% to Rs 962.40 crore, allowing the operating profits to improve 6% at Rs 1464.99 crore. The cost-to-income ratio improved to 39.6% in Q4FY2025 from 40.7% in Q4FY2024. Depreciation jumped 48% to Rs 40.98 crore, while provisions fell 7% to Rs 618.49 crore. Profit before tax increased 16% yoy basis at Rs 805.52 crore. Effective tax rate increased to 21.1% in Q4FY2025 from 20.3% in Q4FY2024. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 15% to Rs 636.17 crore for Q4FY2025. Strong retail franchise with a Retail Book Size of Rs 95180 crore, up 19% YoY for FY25. FY25 retail disbursements at Rs 60040 crore vs Rs 54267 crore, up 11% YoY. Q4FY25 retail disbursements remained stable at Rs 14899 crore. The quarterly Weighted Average Cost of Borrowing (WACB) reduced by 1 bps (QoQ) to 7.84% in Q4FY25 through diversified liability mix. Gross Stage 3 assets of the company rose to 3.29% end March 2025 from 3.23% a quarter ago and 3.15% a year ago, while the Net State 3 assets have eased to 0.87% from 0.97% a quarter ago and rose from 0.79% a year ago. The provision coverage ratio eased to 71% from 76% a year ago. Credit cost for Q4FY25 stood at 2.54% vs 2.49% for Q3FY25. Retailisation was at 97% of overall book. Retail book at Rs 95180 crore, recorded growth of 19% YoY. Consolidated book at Rs 97762 crore, shown growth of 14% YoY. Retail disbursements for FY25 at Rs 60040 crore, increase of 11% YoY Secured assets disbursement growth led by Home Loans & Loan Against Property (LAP) at 27% YoY and Farmer Finance at 16% YoY. Wholesale book reduced to Rs 2582 crore in FY25 from Rs 5528 crore in FY24, reduction of 53% YoY. Net Interest Margin + Fees & Other Income at 10.15% vs 10.33% in Q3FY25. RoA stood at 2.22% vs 2.19%, up 3 bps YoY. RoE stood at 10.13 vs 9.53%, up 60 bps YoY. Retail disbursements for Q4FY25 at Rs 14899 crore against Rs 15044 crore in the previous year. Secured assets disbursement growth led by Farmer Finance at 15% YoY. Risk-calibrated disbursement strategy in Rural Business Finance, resulting in reduced disbursements for the quarter at Rs 5114 crore, down 11% YoY. Book value per share of the company stood at Rs 102.47 per share at end March 2025. Adjusted book value (net of NNPA) per share of the company stood at Rs 98.74 per share at end March 2025.
Business Highlights:
The Company's granular and deep pan-India Retail franchise is led by its strong distribution capabilities namely, its geographic presence in around 2 Lakh villages from over 2085 rural meeting centers / branches and more than 212 branches across urban centers. The Company also leverages its 2.6 crore plus customer database to drive a credible cross-sell and up-sell franchise contributing 36% of the Company's repeat disbursements in value and 49% in count in Q4FY2025. In FY25, the retail book witnessed a strong growth of 19% YoY to close at Rs 95180 crore and disbursements grew by 11% YoY to Rs 60,040 crore. Both these factors led to improved retailisation of the total lending book to 97%.Rural Business Finance: Book size up 6% to Rs 26,320 crore vs Rs 24,716 crore YoY. Annual disbursements for FY25 at Rs 20,921 crore vs Rs 21,495 crore, down 3% YoY. Quarterly disbursements for Q4FY25 at Rs 5,114 crore vs Rs 5,768 crore, down 11% YoY. A risk calibrated disbursement strategy was followed in the business owing to a fluid sectoral credit environment.
Farmer Finance: Book size up 10% to Rs 15,219 crore vs Rs 13,892 crore YoY. Annual disbursements for FY25 at Rs 7,935 crore vs Rs 6,848 crore, up 16% YoY. Quarterly disbursements for Q4FY25 at Rs 1,755 crore vs Rs 1,530 crore, up 15% YoY. Double digit growth showcased by the segment aided by a better than average monsoon and improving rural liquidity.
Two-wheeler Finance: Book size up 10% to Rs 12,321 crore vs Rs 11,205 crore YoY. Annual disbursements for FY25 at Rs 9,285 crore vs Rs 8,586 crore, up 8% YoY. Quarterly disbursements for Q4FY25 at Rs 1,857 crore vs Rs 2,502 crore, down 26% YoY on account of better customer profiling through 'Project Cyclops' and channel risk calibration.
Personal Loans: Book size up 34% to Rs 8,648 crore vs Rs 6,440 crore YoY. Annual disbursements for FY25 at Rs 6,096 crore vs Rs 4,285 crore, up 42% YoY. Quarterly disbursements for Q4FY25 at Rs 1,915 crore vs Rs 968 crore, up 98% YoY. Growth in the segment aided by big tech partnerships and tapping growth in prime segments.
Housing Loans and Loan Against Property: Book size up 35% to Rs 24,929 crore vs Rs 18,443 crore YoY. Annual disbursements for FY25 at Rs 9,582 crore vs Rs 7,544 crore, up 27% YoY. Quarterly disbursements for Q4FY25 at Rs 2,332 crore vs Rs 2,513 crore, down 7% YoY. Growth in the segment aided by newer partnerships and strong network of distribution channels.
SME Finance: Book size up 67% to Rs 6,524 crore vs Rs 3,905 crore YoY. Annual disbursements for FY25 at Rs 5,000 crore vs Rs 3,657 crore, up 37% YoY. Quarterly disbursements for Q4FY25 at Rs 1,528 crore vs Rs 1,213 crore, up 26% YoY. Growth in the segment aided through increase in direct sourcing and existing strong network of distribution channels.
Foray into Gold Loans with proposed acquisition: Entered into Business Transfer Agreement with Paul Merchants Finance for the proposed acquisition of their gold loan business undertaking by way of a slump sale on a going concern basis, subject to fulfilment of customary closing conditions.
Financial Performance FY2025
L&T Finance has recorded 14% jump in net profit to Rs 2643.66 crore in the half year ended March 2025 (FY2025). The consolidated income from operations increased 14% to Rs 14663.29 crore for the year ended March 2023, while other income of the company jumped 12% to Rs 1277.69 crore. The total income increased 13% to Rs 15940.98 crore for FY2025. Interest expenses increased 12% to Rs 5996.76 crore. Operating expenses increased 13% to Rs 3845.67 crore, allowing the operating profits to improve 15% at Rs 6098.55 crore. The cost-to-income ratio was steady at 38.7% in FY2025 from 39.1% in FY2024. Depreciation declined 21% to Rs 138.90 crore, while provisions fell 16% to Rs 2468.39 crore. Profit before tax surged 15% yoy basis at Rs 3491.26 crore. There is exceptional income of Rs 0 crore Effective tax rate increased to 24.3% in FY2025 from 23.5% in FY2024. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 14% to Rs 2643.66 crore for FY2025. Net Interest Margin + Fees & Other Income was at 10.59% from 10.67%. the company recorded highest ever annual Return on Assets (RoA) of 2.44% from 2.32%, up 12 bps YoY. Return on Equity (RoE) stood at 10.87% against 10.35%, up 52 bps YoY. Credit cost for FY25 stood at 2.50% vs 2.67% for FY24 (Credit Cost for FY24 was arrived at after additional prudential provision on Security Receipts of Rs 175 crore). Credit cost for FY25 arrived at after utilizing macroprudential provisions to the extent of Rs 400 crore.| L&T Finance: Consolidated Results | ||||||
| Particulars | 2503 (3) | 2403 (3) | Var % | 2503 (12) | 2403 (12) | Var % |
| Income from operations | 3749.88 | 3322.60 | 13 | 14663.29 | 12913.93 | 14 |
| Other Income | 277.34 | 353.25 | -21 | 1277.69 | 1137.12 | 12 |
| Total Income | 4027.22 | 3675.85 | 10 | 15940.98 | 14051.05 | 13 |
| Interest Expended | 1599.83 | 1335.09 | 20 | 5996.76 | 5377.19 | 12 |
| Operating Expense | 962.40 | 952.64 | 1 | 3845.67 | 3393.10 | 13 |
| Operating Profits | 1464.99 | 1388.12 | 6 | 6098.55 | 5280.76 | 15 |
| Depreciation / Amortization | 40.98 | 27.66 | 48 | 138.90 | 114.77 | 21 |
| Provisions and Write-offs | 618.49 | 666.44 | -7 | 2468.39 | 2136.96 | 16 |
| Profit before EO | 805.52 | 694.02 | 16 | 3491.26 | 3029.03 | 15 |
| Exceptional Item | 0 | 0 | - | 0 | 0 | - |
| PBT after EO | 805.52 | 694.02 | 16 | 3491.26 | 3029.03 | 15 |
| Tax Expense | 169.68 | 141.00 | 20 | 847.84 | 711.90 | 19 |
| Net Profit for the period | 635.84 | 553.02 | 15 | 2643.42 | 2317.13 | 14 |
| Share in profit/(loss) of associate company | 0.00 | 0.00 | - | 0.00 | 0.00 | - |
| Profit attributable to non-controlling interest | -0.33 | -0.86 | -62 | -0.24 | -2.97 | -92 |
| PAT | 636.17 | 553.88 | 15 | 2643.66 | 2320.10 | 14 |
| EPS* (Rs) | 10.2 | 8.9 | ' | 10.6 | 9.3 | ' |
| Adj BV (Rs) | 98.7 | 91.5 | ' | 98.7 | 91.5 | ' |
| * Annualized on current equity of Rs 2494.87 crore EO and relevant tax. Face Value: Rs 10, Figures in Rs crore | ||||||
| PL: Profit to Loss, LP: Loss to Profit | ||||||
| Source: Capitaline Corporate Database | ||||||
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