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Prabhudas Lilladher Report
L&T Finance Holdings Ltd.’s Q4 FY22 earnings (profit after tax at Rs 3.4 billion) stood above our estimates (our estimate: Rs 3.3 billion) on account of lower provisions.
Loan traction showed good sequential growth at Rs 883.4 billion (our estimate: Rs 904 billion) with book growing 3.3% QoQ, yet declining 6% YoY.
Disbursements strongly grew at 48%QoQ/82% YoY to Rs 147.3 billion led by consumer, micro and housing loans.
Asset quality improved across segments due to on ground collection efforts.
Overall gross stage-III reduced to 3.80% in Q4 versus 5.91% in Q3. Also net stage-III came in at 2.0% with 48% provision coverage ratio.
In order to counter impact any future Covid-19 waves, L&T Finance's management kept additional provisions of Rs 17.2 billion (2.10% of standard assets) to be gradually released in coming quarters.
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