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Mumbai: L&T Finance Holdings Ltd (LTFH) on Friday reported a 51% fall in its consolidated net profit to 291 crore for the quarter ended December as the operating impact of impairments got transmitted to the bottom line. The company had posted a net profit of 591 crore in the for the corresponding quarter of 2019-20.

Total Income fell 3.04% yoy at 3622.16 crore for the quarter ended 31 December against 3735.79 crore for the same quarter last year. Interest income continued to be the mainstay of the top line accounting for 90% of total revenues with fees and commissions accounting for the balance, LTFH said in a regulatory filing.

For the Dec-20 quarter, the operating profits fell by 51.92% at Rs348.67cr on the back of a near doubling of the impairment costs in the quarter from 481.13 for the December 2019 quarter to 925.97 crore, as a result, operating profit margin (OPM) fell sharply from 19.41% in the Dec-19 quarter to 9.63% in Dec-20 quarter. The cost of borrowing in the quarter was down by 50 bps at 7.82%.

According to the focus lending portfolio of L&T Finance Holdings, the largest share was of infrastructure funding followed by rural finance and housing finance in the Dec-20 quarter, the rural finance book grew by 4% YoY, aided by growth in farm equipment finance book by 18%, and the Two-Wheeler Finance book by 9%. The Home Loan segment grew by 3% YoY.

Speaking on the occasion, Dinanath Dubhashi Managing Director & CEO, LTFH, said, “In the long term, structural changes such as government initiatives, normal monsoons and better infrastructure will continue to improve financial health in rural. We will maintain focus on capitalizing on our market leadership position in Farm Equipment and Two-Wheeler Finance to drive business volumes."

As of December 2020, the company maintained Rs. 16,442 crore of liquidity including assets in the form of cash, FDs and other liquid investments of Rs. 7,709 crore. LTFH stock closed at 105.10 apiece on BSE, down 1.87% over previous close.

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