L&T Finance Q4 Review - Asset Quality Vulnerability Increases: Prabhudas Lilladher
An official shows new currency notes of Rs 500 at State Bank of India head office in New Delhi. (Source: PTI)

L&T Finance Q4 Review - Asset Quality Vulnerability Increases: Prabhudas Lilladher

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Prabhudas Lilladher Report

Q4 FY21 earnings stood stable for L&T Finance Holdings Ltd. owing to robust disbursals in key businesses (micro/consumer/home loans) aiding fees and steady asset quality (5% gross non-performing asset versus 5.3%: Q3).

However, as second wave engulfs hinterlands, we foresee increased vulnerability for the company's business led by-

1. concentrated exposures of rapidly expanding two-wheeler/micro/consumer loans in states full of uncertainties (elections, higher Covid-19 cases, partial lockdowns)

2. continued higher write-offs (Rs 7 billion for Q4 FY21, Rs 19 billion for FY21 largely led by rural business) partially aiding asset quality improvement

3. 6% provisions on micro loans although down from 10% (Q3 FY21) stand higher than industry run-rate.

Click on the attachment to read the full report:

Prabhudas Lilladher L&T Finance Holding Q4FY21 Result Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.