The company's provisions and write-offs increased by 25.8% to Rs 604.52 crore in the second quarter compared with the same period last year.
Profit before tax in Q2 September 2020 stood at Rs 329.03 crore, down by 56.5% from Rs 756.29 crore in Q2 September 2019. Current tax expense during the quarter rose 0.9% year-on-year (YoY) to Rs 242.81 crore.
The company said that the quarter saw a significant up-take in rural and infrastructure finance, led by a revival in the economy, leading to significant month-on-month (MoM) improvement in collections. LTFH took full advantage of the faster than expected recovery in rural and infrastructure segments and is well positioned for the upcoming festive season.
Commenting on the financial results, Dinanath Dubhashi, managing director & CEO, LTFH, said, "As anticipated, Q2 saw a revival in the rural economy, which we believe will also drive the economic growth of the country for the next few quarters. In Q2, our Rural business witnessed significant growth momentum backed by our market leading position and strong digital and data analytics infrastructure for the lending business. The performance was also boosted by excellent pick up in disbursements in our renewable energy portfolio.
Furthermore, with the incremental macro prudential provisions made in the quarter we have a well provided for balance sheet. AAA rated NBFCs like LTFH are seeing a gradual easing out of liquidity conditions and our focus now would be to reduce excess liquidity and bring down the cost of borrowing."
Sharing an outlook for Q3FY21, Dubhashi further added, "The rural revival led by higher reservoir levels, better water management systems, solid monsoons as well as the farm bill reform, points towards the beginning of an upward swing for companies with robust rural business models."
Separately, the company informed that its board, at the meeting held on 22 October 2020, had approved the appointment of Tushar Patankar as the chief risk officer of the company for a tenor of two years with immediate effect.
L&T Finance Holdings (LTFH) is a financial holding company offering a focused range of financial products and services across rural, housing and infrastructure finance sectors, as well as in mutual fund products, through its wholly-owned subsidiaries, viz., L&T Finance, L&T Housing Finance, L&T Infrastructure Finance Company, L&T Infra Debt Fund and L&T Investment Management.