L&T Finance Holdings Ltd. (LTFH) has announced a groundbreaking performance for the third quarter of the fiscal year 2024, with a Profit After Tax (PAT) of Rs. 640 Crore, marking a significant 41% year-on-year increase. This remarkable achievement is part of LTFH’s strategic evolution into a predominantly retail-focused Non-Banking Financial Company (NBFC), showcasing a robust Retail Book Size of approximately Rs. 75,000 Crore. Adding to its digital prowess, the PLANET app has also seen an impressive 76 lakh downloads to date.

Surpassing Targets with Exponential Growth

Under the ambitious ‘Lakshya 2026’ initiative, LTFH has exceeded its goals two years in advance, demonstrating exceptional performance across the board:

– The retail sector of the business now constitutes 91% of the total, surpassing the ‘Lakshya 2026’ target of over 80%.

– The Retail Book has witnessed a 31% year-on-year growth, outdoing the projected growth rate of 25%.

– The Retail Asset Quality metrics have shown remarkable stability with Gross Stage 3 (GS3) at 2.95% and Net Stage 3 (NS3) at 0.64%, well within the target thresholds.

Moreover, LTFH recorded its highest ever quarterly Retail Disbursements at Rs. 14,531 Crore, up by 25% year-on-year, fueled by a robust business model and significant growth across all retail segments.

Strategic Mergers and Enhanced Digital Focus

The quarter also saw the completion of the merger of L&T Finance Ltd., L&T Infra Credit Ltd., and L&T Mutual Fund Trustee Ltd. with L&T Finance Holdings Ltd., creating a ‘Single Lending Entity.’ This strategic move is aimed at streamlining operations and bolstering the company’s position in the market.

Setting New Benchmarks in the Financial Sector

L&T Finance Holdings Ltd. has not only set new benchmarks in the financial sector with its innovative approach to digital and data analytics but has also reaffirmed its commitment to creating a stable and sustainable organization for all stakeholders. With a focus on rural and urban ecosystems, LTFH offers a diverse range of financial products, including Rural Group Loans & Micro Finance, Farm Equipment Loans, Two-Wheeler Loans, Personal Loans, Home Loans & Loan Against Property, as well as SME Loans.

A Vision for the Future

As Sudipta Roy prepares to take over as Managing Director and Chief Executive Officer of L&T Finance Holdings Ltd., he emphasizes the company’s achievement of ‘Lakshya 2026’ goals ahead of schedule. The future strategy revolves around ensuring the sustainability of these achievements through enhanced customer acquisition, multi-axis credit underwriting, futuristic digital architecture, heightened brand visibility, and ramping up tech talent.

L&T Finance Holdings Ltd.’s (LTFH) remarkable achievement in the third quarter of the fiscal year 2024, with a 41% YoY increase in Profit After Tax (PAT) and a substantial growth in its retail book, signifies a pivotal moment in the non-banking financial company (NBFC) sector in India. This performance not only underscores the company’s robust business model and strategic foresight but also its agility in adapting to the rapidly evolving financial landscape.

Accelerated Digital Transformation

The transition of LTFH into a predominantly retail-focused NBFC, achieving the ‘Lakshya 2026’ goals two years ahead of schedule, is a testament to the company’s commitment to leveraging digital transformation for business growth. The significant increase in the PLANET app downloads to 76 lakh illustrates the effectiveness of its digital engagement strategies and the increasing consumer preference for digital financial solutions. This digital pivot is likely to set a benchmark for the industry, emphasizing the critical role of technology in enhancing customer experience and operational efficiency.

Strategic Growth and Diversification

The merger of L&T Finance Ltd., L&T Infra Credit Ltd., and L&T Mutual Fund Trustee Ltd. with LTFH, creating a ‘Single Lending Entity’, exemplifies a strategic approach to consolidation. This move not only simplifies the organizational structure but also enhances the company’s ability to offer integrated financial solutions across diverse segments. Such strategic consolidation is expected to improve the company’s market competitiveness and drive sustainable long-term growth.

Focus on Asset Quality and Retail Segment

LTFH’s emphasis on retail asset quality, with Gross Stage 3 (GS3) and Net Stage 3 (NS3) metrics performing better than targeted, reflects its prudent risk management and credit underwriting practices. The growth in retail disbursements by 25% YoY and the expansion of the retail book by 31% YoY demonstrate the company’s strong foothold in the retail financing sector. This focus on the retail segment, coupled with innovative financing solutions, positions LTFH to capitalize on the growing demand for retail financial services in India.

Future Outlook

The financial sector in India stands at a crossroads, with digital transformation, consumer-centric approaches, and regulatory changes shaping its future. LTFH’s performance and strategic initiatives place it at the forefront of this transformation, poised for continued growth and innovation. The company’s focus on building a stable and sustainable organization, as articulated by the incoming CEO Mr. Sudipta Roy, aligns with the broader industry trends towards digitalization, customer focus, and financial inclusion.

In conclusion, L&T Finance Holdings Ltd.’s achievements in Q3FY24 are indicative of its strong market position and strategic vision. The company’s ability to exceed its ‘Lakshya 2026’ goals ahead of time not only highlights its operational excellence but also sets a new standard for the NBFC sector in India, emphasizing the importance of digital innovation, strategic consolidation, and a focus on retail financing for achieving sustainable growth.

  India, L&T Finance, Sudipta Roy