L&t Finance Ltd · NSE:LTF
L&t Finance — Q4 FY2022 Earnings Presentation
53 slides from L&t Finance's earnings presentation, Apr 29, 2022
Slide 1: L&T Financial Services
e L&T Financial Services April 29, 2022 National Stock Exchange of India Limited BSE Limited Exchange Plaza, Corporate Relations Department, Plot No. C/1 , G Block, 1st Floor, New Trading Ring, Sandra - Kurla Complex, Sandra (East), P. J . Towers, Dalal Street, Mumbai - 400 051. Mumbai - 400 001. Sy
Slide 2: Strategy & Results Update – FY22 & Q4FY22
Strategy & Results Update – FY22 & Q4FY22 1
Slide 3: Disclaimer
Disclaimer The information in this presentation is provided by L&T Finance Holdings Limited (the “Company”) for information purpose only. This presentation or any information therein may not be used, reproduced, copied, photocopied, duplicated or otherwise reproduced in any form or by any means; or
Slide 4: Agenda
Agenda A Q4FY22 Synopsis B Journey through the Covid quarters i An inflection point for Retail ii Moderation in Wholesale portfolio iii Consolidated performance overview C Summarising FY22 and Way forward 3
Slide 5: Q4FY22 Synopsis (1/2)
Q4FY22 Synopsis (1/2) • Achieved highest ever quarterly retail disbursement (Rs. 8,105 Cr), up 22% YoY • Retail: Strong business momentum across all products o ML business recorded highest ever quarterly disbursements at Rs. 3,881 Cr, recording a growth of 22% YoY o Maintained market share in Farm a
Slide 6: Q4FY22 Synopsis (2/2)
Q4FY22 Synopsis (2/2) • Retail: QoQ improvement across businesses owing to enhanced on-ground collection efforts and analytics based resource allocation • Wholesale & Defocused: ARC sale of Rs. 1,914 Cr in line with business strategy • Reduction in overall GS3 from 5.91% in Q3 to 3.80% in Q4FY22. NS
Slide 7: Agenda
Agenda A Q4FY22 Synopsis B Journey through the Covid quarters i An inflection point for Retail ii Moderation in Wholesale portfolio iii Consolidated performance overview C Summarising FY22 and Way forward 6
Slide 8: Retail Finance (1/4) Strong disbursements… back to pre-Covid levels
Retail Finance (1/4) Strong disbursements… back to pre-Covid levels RETAIL in Rs Cr 8,105 Includes Rural, Retail Housing & SME 6,324 3,611 981 Q3FY20 Q1FY21 Q1FY22 Q4FY22 FARM TWO-WHEELER MICRO LOANS 2,000 1,800 1,370 1,357 2,000 4,500 3,881 1,600 1,800 1,495 1,380 4,000 1,400 1,154 1,600 3,500 1,20
Slide 9: Retail Finance (2/4) Coupled with robust collections
Retail Finance (2/4) Coupled with robust collections FARM TWO-WHEELER MICRO LOANS 100.0% 94.4% 91.0% 120.0% 95.0% 89.0% 98.2% 96.8% 98.8% 120.0% 98.7% 99.6% 90.0% 86.5% 100.0% 100.0% 90.5% 85.0% 80.0% 71.4% 80.0% 80.0% 60.0% 60.0% 53.5% 75.0% 40.0% 40.0% 70.0% 20.0% 20.0% 65.0% 0.0% 0.0% Dec'19 Jun'
Slide 10: Retail Finance (3/4) Led to strong book growth
Retail Finance (3/4) Led to strong book growth in Rs Cr RETAIL BOOK 45,084 45,084 40,824 39,312 10% 40,096 36,069 4% 39,067 39,214 9% Q3FY20 Q1FY21 Q1FY22 Q4FY22 FY19 FY20 FY21 FY22 Pre-Covid Covid 1.0 Covid 2.0 Coming out of Covid 10% YOY INCREASE IN RETAIL BOOK IN FY22 – AN YEAR IMPACTED BY COVID
Slide 11: Retail Finance (4/4) Thereby creating an inflection point for Retail
Retail Finance (4/4) Thereby creating an inflection point for Retail Pre-Covid Covid 1.0 Covid 2.0 Coming out of Covid Q3FY20 Q1FY21 Q1FY22 Q4FY22 6% 5% 3% 2% 28% 28% 34% 34% 39% 37% 40% 40% 11% 12% 12% 15% 13% 12% 15% 14% Rural Retail Housing Real Estate Infrastructure Finance Defocused Retail - 39
Slide 12: Agenda
Agenda A Q4FY22 Synopsis B Journey through the Covid quarters i An inflection point for Retail ii Moderation in Wholesale portfolio iii Consolidated performance overview C Summarising FY22 and Way forward 11
Slide 13: Wholesale Finance (1/2) Infrastructure Finance
Wholesale Finance (1/2) Infrastructure Finance in Rs Cr INFRASTRUCTURE FINANCE DISBURSEMENTS BOOK 39,674 39,276 6,098 33,290 30,521 2,069 1,089 1,480 Q3FY20 Q1FY21 Q1FY22 Q4FY22 Q3FY20 Q1FY21 Q1FY22 Q4FY22 CONTINUED ASSET / CAPITAL LIGHT MODEL IN INFRASTRUCTURE FINANCE 12
Slide 14: Wholesale Finance (2/2) Real Estate Finance
Wholesale Finance (2/2) Real Estate Finance in Rs Cr REAL ESTATE FINANCE DISBURSEMENTS BOOK 15,215 15,216 1,168 12,372 11,210 528 248 133 Q3FY20 Q1FY21 Q1FY22 Q4FY22 Q3FY20 Q1FY21 Q1FY22 Q4FY22 FOCUS ON PROJECT COMPLETION AND RIGOROUS MONITORING 13
Slide 15: Agenda
Agenda A Q4FY22 Synopsis B Journey through the Covid quarters i An inflection point for Retail ii Moderation in Wholesale portfolio iii Consolidated performance overview C Summarising FY22 and Way forward 14
Slide 16: Consolidated Performance (1/4)
Consolidated Performance (1/4) Book in the midst of transitioning into the next phase in Rs Cr TOTAL DISBURSEMENTS TOTAL BOOK 14,731 99,453 98,879 88,440 88,341 9,561 5,223 2,318 Q3FY20 Q1FY21 Q1FY22 Q4FY22 Q3FY20 Q1FY21 Q1FY22 Q4FY22 Pre-Covid Covid 1.0 Covid 2.0 Coming out of Covid RETAIL BOOK GRO
Slide 17: Consolidated Performance (2/4)
Consolidated Performance (2/4) Higher Retail growth led to robust NIMs + Fees % of average book CONSOLIDATED NIMs+FEES 8.17% 7.84% 7.52% 7.29% 7.15% 6.95% 5.78% FY20 FY21 FY22 Q3 Q1 Q1 Q4 FY20 FY21 FY22 FY22 Pre-Covid Covid 1.0 Covid 2.0 Coming out of Covid HIGHEST EVER NIMS+FEES OF 7.84% IN FY22 RI
Slide 18: Consolidated Performance (3/4) …and stable asset quality
Consolidated Performance (3/4) …and stable asset quality LTFH CONSOLIDATED – ASSET QUALITY Pre-Covid Covid 1.0 Covid 2.0 Coming out of Covid 57% 69% 65% 48% 6,000 5,662 4,939 4,881 5,000 7% 5.94% 5.75% 4,000 5.24% 3,249 3,000 2,458 3.80% 4% 2,000 1,553 1,691 1,681 2.67% 2.07% 2.00% 1,000 1.71% 0 1%
Slide 19: Consolidated Performance (4/4) Supported by strong liability profile
Consolidated Performance (4/4) Supported by strong liability profile DIVERSIFIED LIABILITY MIX WEIGHTED AVERAGE COST OF BORROWING (WAC) 5% 1% 5% 1% Bank Loan 7% 7% 6% 5% NCD Pvt 38% 41% Retail NCD 8.43% 8.49% 8.32% CP 43% 41% 7.82% ECB 7.65% 7.64% 7.53% 7.47% Others 7.34% Q4FY21 Q4FY22 Q4 Q1 Q2 Q3 Q
Slide 20: Agenda
Agenda A Q4FY22 Synopsis B Journey through the Covid quarters i An inflection point for Retail ii Moderation in Wholesale portfolio iii Consolidated performance overview C Summarising FY22 and Way forward 19
Slide 21: Summarising FY22
Summarising FY22 Retail book share increased from 43% to 51% Wholesale business book moderated by 17% NIMs + Fees at 7.84% (up 89bps YoY) Lowest ever yearly WAC at 7.50% GS3 stands at 3.80% with a PCR of 48% 20
Slide 22: Way forward
Way forward Future readiness with cutting edge tech Sustained profit & growth Sustainable growth through engine through Retailisation ESG To be a leading Tech-enabled Retail finance company with Customer at the core POISED TO LEAP-FROG INTO THE NEXT PHASE OF GROWTH 21
Slide 23: Appendix
Appendix aS eee eas ® L&T Financial Services
Slide 24: Appendix
Appendix A Financials B Other key annexures 23
Slide 25: LTFH Consolidated – Capital allocation and RoE bridge: Q4FY22
LTFH Consolidated – Capital allocation and RoE bridge: Q4FY22 Q4 FY21 Q4 FY22 PAT Business Segments (₹ Cr) PAT Net Worth RoE Y-o-Y (%) PAT Net worth RoE 189 4,905 16.45% Rural Finance 300 6,189 19.67% 58% 172 4,702 14.92% Housing Finance 12 4,636 1.01% (93%) 99 6,714 5.91% Infrastructure Finance 33
Slide 26: LTFH Consolidated – Capital allocation and RoE bridge: FY22
LTFH Consolidated – Capital allocation and RoE bridge: FY22 FY21 FY22 PAT Business Segments (₹ Cr) PAT Net Worth RoE Y-o-Y (%) PAT Net worth RoE 491 4,905 10.58% Rural Finance 769 6,189 13.55% 57% 424 4,702 9.54% Housing Finance 62 4,636 1.27% (85%) 380 6,714 5.81% Infrastructure Finance 303 6,569 4
Slide 27: LTFH Consolidated – Summary financial performance
LTFH Consolidated – Summary financial performance PERFORMANCE SUMMARY Q4FY21 Q3FY22 Q4FY22 Y-o-Y % Summary P&L (Rs Cr ) FY21 FY22 Y-o-Y (%) 3,158 2,787 2,822 (11%) Interest Income 12,819 11,356 (11%) 1,608 1,418 1,397 (13%) Interest Expense 7,203 5,767 (20%) 1,550 1,369 1,425 (8%) NIM 5,615 5,589 0%
Slide 28: LTFH Consolidated – Key ratios
LTFH Consolidated – Key ratios KEY RATIOS Q4FY21 Q3FY22 Q4FY22 Key Ratios FY21 FY22 13.05% 12.84% 13.03% Yield 12.94% 12.91% 6.41% 6.31% 6.58% Net Interest Margin 5.67% 6.35% 1.76% 1.79% 1.59% Fee & Other Income 1.28% 1.49% 8.17% 8.10% 8.17% NIM + Fee & Other Income 6.95% 7.84% 2.05% 2.78% 2.93% Ope
Slide 29: Lending Business – Business wise disbursement split
Lending Business – Business wise disbursement split DISBURSEMENT Q4FY21 Q3FY22 Q4FY22 Y-o-Y (%) Segments (Rs Cr ) FY21 FY22 Y-o-Y (%) 1,244 1,492 1,154 (7%) Farm Equipment 4,477 5,152 15% 1,372 1,637 1,380 1% 2W Finance 4,436 5,084 15% 3,181 3,157 3,881 22% Micro Loans 6,613 9,950 50% 229 650 798 24
Slide 30: Lending Business – Business wise book split
Lending Business – Business wise book split BOOK Q4FY21 Segments (Rs Cr) Q3FY22 Q4FY22 Y-o-Y (%) 10,261 Farm Equipment 11,210 11,317 10% 7,122 2W Finance 7,306 7,462 5% 12,207 Micro Loans 11,955 13,278 9% 490 Consumer Loans 1,696 2,301 369% 30,080 Rural Finance 32,166 34,357 14% 7,333 Home Loans 7,4
Slide 31: Rural Finance – Summary financial performance
Rural Finance – Summary financial performance PERFORMANCE SUMMARY Q4FY21 Q3FY22 Q4FY22 Y-o-Y % Summary P&L (Rs Cr ) FY21 FY22 Y-o-Y (%) 1,375 1,384 1,495 9% Interest Income 5,349 5,590 5% 446 433 452 1% Interest Expense 1,893 1,739 (8%) 929 950 1,043 12% NIM 3,456 3,851 11% 163 148 149 (9%) Fee & Ot
Slide 32: Rural Finance – Key ratios
Rural Finance – Key ratios KEY RATIOS Q4FY21 Q3FY22 Q4FY22 Key Ratios FY21 FY22 18.76% 17.31% 18.31% Yield 18.79% 17.92% 12.86% 11.89% 12.77% Net Interest Margin 12.14% 12.35% 2.26% 1.85% 1.82% Fee & Other Income 1.64% 1.57% 15.11% 13.74% 14.60% NIM + Fee & Other Income 13.78% 13.92% 4.81% 4.81% 5.1
Slide 33: Rural Finance - Asset quality
Rural Finance - Asset quality RURAL - ASSET QUALITY 80% 75% 75% 13% 1,334 1,258 1,164 11% 9% 7% 5% 3.96% 4.00% 3.97% 315 328 3% 235 0.82% 1.03% 1.01% 1% -1% Q4FY21 Q3FY22 Q4FY22 GS3 (Rs Cr) NS3 (Rs Cr) GS3 (%) NS3 (%) Carrying additional provision at Rs 1,356 Cr (4.20% of standard Rural book), over
Slide 34: Housing Finance – Summary financial performance
Housing Finance – Summary financial performance PERFORMANCE SUMMARY Q4FY21 Q3FY22 Q4FY22 Y-o-Y % Summary P&L (Rs Cr ) FY21 FY22 Y-o-Y (%) 711 650 600 (16%) Interest Income 3,170 2,585 (18%) 426 400 384 (10%) Interest Expense 1,992 1,615 (19%) 285 250 216 (24%) NIM 1,178 970 (18%) 42 30 24 (43%) Fee
Slide 35: Housing Finance – Key ratios
Housing Finance – Key ratios KEY RATIOS Q4FY21 Q3FY22 Q4FY22 Key Ratios FY21 FY22 11.38% 11.50% 11.08% Yield 11.94% 11.46% 4.57% 4.42% 4.00% Net Interest Margin 4.44% 4.30% 0.67% 0.52% 0.44% Fee & Other Income 0.55% 0.43% 5.23% 4.95% 4.44% NIM + Fee & Other Income 4.98% 4.73% 1.15% 1.89% 2.22% Opera
Slide 36: Housing Finance - Asset quality
Housing Finance - Asset quality HOUSING - ASSET QUALITY 32% 22% 29% 1,726 1,685 9% 7.94% 7.83% 1,341 1,204 6% 6.28% 5.72% 3% 343 1.46% 234 1.00% 0% Q4 FY21 Q3 FY22 Q4 FY22 GS3 (Rs Cr) NS3 (Rs Cr) GS3 (%) NS3 (%) PCR (%) Carrying additional provision at Rs 241 Cr (1.21% of standard Housing book), ove
Slide 37: Infrastructure Finance – Summary financial performance
Infrastructure Finance – Summary financial performance PERFORMANCE SUMMARY Q4FY21 Q3FY22 Q4FY22 Y-o-Y % Summary P&L (Rs Cr ) FY21 FY22 Y-o-Y (%) 999 703 671 (33%) Interest Income 3,918 2,965 (24%) 673 535 535 (21%) Interest Expense 2,909 2,223 (24%) 325 167 136 (58%) NIM 1,009 742 (26%) 119 95 74 (3
Slide 38: Infrastructure Finance – Key ratios
Infrastructure Finance – Key ratios KEY RATIOS Q4FY21 Q3FY22 Q4FY22 Key Ratios FY21 FY22 10.13% 9.43% 8.87% Yield 9.91% 9.33% 3.30% 2.24% 1.79% Net Interest Margin 2.55% 2.34% 1.20% 1.28% 0.97% Fee & Other Income 0.76% 0.94% 4.50% 3.52% 2.77% NIM + Fee & Other Income 3.31% 3.28% 0.36% 0.66% 0.53% Op
Slide 39: Infrastructure Finance - Asset quality
Infrastructure Finance - Asset quality INFRASTRUCTURE FINANCE- ASSET QUALITY 18% 73% 57% 34% 16% 14% 12% 2,238 10% 8% 6.21% 1,416 6% 5.10% 4% 610 605 223 147 2% 2.25% 0.75% 1.77% 0.50% 0% Q4 FY21 Q3 FY22 Q4 FY22 GS3 (Rs Cr) NS3 (Rs Cr) GS3 (%) NS3 (%) PCR (%) 38 GS3 - Gross Stage 3; NS3 - Net Stage
Slide 40: Infrastructure Finance – Portfolio wise split
Infrastructure Finance – Portfolio wise split D I Sectors (Rs. Cr) Q4FY21 Q3FY22 Q4FY22 Y-o-Y (%) S Renewable Power 493 1,546 5,564 1029% B U Roads 563 188 351 (38%) R S Power Transmission 36 - 155 331% E M Others1 74 24 28 (63%) E N T Total 1,166 1,758 6,098 423% Q4FY21 Q3FY22 Q4FY22 Sectors (Rs. C
Slide 41: Strengthened Balance Sheet
Strengthened Balance Sheet Provisions on Non GS3 book Particulars (Rs. Cr) Total Lending Business Loan book size (excluding GS3 book) - (1) 82,240 Provision on stage 1 and stage 2 assets as per ECL model - (2) 619 Additional provisions & OTR provisions - (3) 1,727 Additional provisions & OTR provisi
Slide 42: Appendix
Appendix A Financials B Other key annexures 41
Slide 43: Product profile and Geographies
Product profile and Geographies ATS ATS Avg Tenor BUSINESS Major Geographies on o/s book on qtrly disb on disb Farm UP, MP, Karnataka, TS, Bihar, Haryana Rs 2.7 Lakhs Rs 4.0 Lakhs 43 months Equipment Two WB, Maharashtra, Gujarat, Assam, TN Rs 66k Rs 74k 26 months Wheeler Rural Micro Loans Rs 25k Rs
Slide 44: Prudent ALM
Prudent ALM As on 31st March, 2022 Structural Liquidity statement 63,078 Cumulative Inflows (Rs. Cr) Cumulative Outflows (Rs. Cr) 36,899 37,314 26,779 21,000 17,529 16,810 9,113 12,291 9,407 3,292 5,959 587 2,171 1-7 days 8-14 days 15 days-1 1-2 months 2-3 months 3-6 months 6-12 months month Cumulat
Slide 45: AAA Credit Rating for LTFH and all its subsidiaries
AAA Credit Rating for LTFH and all its subsidiaries Credit Ratings – LTFH and its subsidiaries • Long-term ratings of LTFH and all its lending subsidiaries have been reaffirmed ‘AAA’ (Stable Outlook) by all 4 rating agencies during FY22 ➢ CRISIL: Mar’22 Ratings Update ➢ CARE: Sept’21 ➢ India Ratings
Slide 46: AUM disclosure
AUM disclosure Mutual Fund ASSETS UNDER MANAGEMENT (RS CR) Quarter ended Mar, 2021 Quarter ended Dec, 2021 Quarter ended Mar, 2022 Fund Type AUM1 Avg. AUM2 AUM1 Avg. AUM2 AUM1 Avg. AUM2 Pure Equity 30,351 30,212 34,644 34,533 33,801 33,709 Hybrid 9,972 10,204 12,215 12,663 10,707 11,588 Fixed Income
Slide 47: ESG@LTFH: Building a Collective Sustainable Future
ESG@LTFH: Building a Collective Sustainable Future To be an environmentally and socially responsible financial institution built on the foundation of ‘Assurance’, focused on generating sustainable long-term value for all our stakeholders Our Vision Sustainability Linked Rupee Loan Water Neutrality C
Slide 48: ESG@LTFH: Building a Collective Sustainable Future
ESG@LTFH: Building a Collective Sustainable Future Environment Social Governance Committed to environmental Investing in stakeholder relationships Ensuring robust governance mechanism stewardship by responsible business through transparent, ethical and through accountability, compliance and conduct
Slide 49: Corporate Social Responsibility
Corporate Social Responsibility Directly linked to creating value DIGITAL FINANCIAL INCLUSION DISASTER MANAGEMENT & OTHER INITIATIVES Reached out to 19,90,000+ beneficiaries, creating Disaster relief through provision of humanitarian aid awareness on financial literacy and COVID vaccination. kits to
Slide 50: LTFS branch footprint
LTFS branch footprint 8 2 10 As of 31st March, 2022 1 No. of States & Union 21 & 1 9 15 Territories 9 4 No. of branches 198 3 13 No. of Micro Loans meeting 16 27 1 1,524 centers* 6 7 No. of employees 24,643 24 10 1 11 12 6 3 49 *All these are in villages/far outskirts of the cities
Slide 51: Board comprises majority of Independent Directors
Board comprises majority of Independent Directors BOARD OF DIRECTORS S.N. Subrahmanyan, Non-Executive Director, Chairperson Dinanath Dubhashi, Managing Director & CEO o Current Managing Director and Chief Executive Officer of Larsen & Toubro Limited. o Over 30 years of experience across multiple dom
Slide 52: Management Team
Management Team Dinanath Dubhashi Managing Director & CEO 32 yrs exp, BNP Paribas, SBI Cap, CARE Ratings Sachinn Joshi Kailash Kulkarni Shiva Rajaraman Raju Dodti Group CFO CE - Investment Management Wholetime Director – L&T Infra Credit CE – Wholesale Finance 32 yrs exp, Aditya Birla Group Head - M
Slide 53: Registered Office: L&T Finance Holdings Limited
Registered Office: L&T Finance Holdings Limited Brindavan, Plot No 177 CST Road, Kalina Santacruz (E), Mumbai 400 098 www.ltfs.com T +91 22 6212 5000/5555 CIN: L67120MH2008PLC181833 52
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