well let’s uh get to our next guest then let’s talk about L&T Finance the company has completed 30 years of operations how’s the business momentum in the near
term what’s the broader Outlook as well to help us out with that we have with us Mr sudipto sudipta Roy the managing director and CEO of the company I’m Mr Roy thanks a lot for joining in and congratulations to you as well as the entire team on this achievement thank you let’s
talk about business you know I’m looking at your a it’s roughly around 93,000 cres OD uh in the near term what kind of AUM growth are you looking at if you could break it up between segments and say in the next 3 to 5 years what kind of a Target do you have on the AUM growth front Okay
see as part of we had initially announced in quar for F22 about the laka strategy for Lent Finance in consonant with overall elen group lxa strategy where we had said that we would grow at
about 25% C and we’ve been growing pretty well in the the last 3 years we have uh increased our retail book from 45,000 crores out to about close to about about you know 80 80 90,000 crores right now uh one of the targets that we have taken on ourselves is to try to see if we can double the
book in about the next uh 3 and a half to four years time is what we would like to do and you know if you look at we are one of those nbfcs which are if you look at our asset profile yes we’re almost actually 50% rural 50% Urban and very few sort of nbfcs have this sort of balanced asset
profile and I do believe that you know our GR growth will come equally from Urban sectors as well as from rural though the urban might outpace rural over the next 3 to 4 years time so what I believe is that this Urban rural split might move to 60% Urban 40% Rural and uh you know in rural as you
know we are the third largest in uh micr Finance uh so that business will continue to grow but probably that business will continue to grow a little lesser clip than you know whatever has
been uh growing in the last 2 to three years yes however the urban businesses especially in your home Loans uh Loan against property SM Loans uh maybe a little bit of Consumer Loans like personal Loans uh two wheer
Loans we are one of the largest in the country in two wheeler Loans most of these Urban consumption driven businesses will continue to grow at a much faster Pace overall we are looking at about a 25% growth rate uh more or less on a state state basis got it and
since you have a fair bit of exposure to the rural as well as Urban as of now 50% a piece give us your sense there’s a debate out there is there pain or there’s no pain you know are you seeing stress in the system particularly in the rural Portfolio so I’ll talk
about the industry obviously there is a little bit of a stress especially in the mfi segment there is leverage that has built right though I would like to believe that we are one of those lenders who is least impacted by by it because of a very prudent lending practices over the last 3 to four
years especially in the mfi segment but however there is a there is stress you know there are uh slippages and there are uh questions around asset quality uh however I do believe that on the back of the good monst that we have seen this year uh and again the election was A disruption you know it
was a 3 to four month disruption and the many of the social flows which were there actually went through a hius during that period majority of the social flows Etc have started you know the monsoon Yield has been good the kif crop has been good we expect the rubby crop to be very
very good as well we had a rocking month in tractor dispersements in the month of October and in that tractor dispersment momentum continues in the month of November and if you were to correlate tractor Demand with sort of rural demand as well you know I think the industry will probably see the
worst of this crisis maybe you know latter part of this quarter early part of next quarter next year I see normaly coming when you say crisis you mean mfi mfi and uh how would you are we you know we spoke with a few other players last week they said well fourth quarter should be the peak of mfi
stress would you agree I would agree with that I would agree with that because the kif crop arrivals have been good we expect the rabby arrivals to be good as well because the water Reser available set at record high after the good monsoons uh so if on the back of both of this the resumption of
social flaws Etc I do believe that sometime in the middle of Q4 is when probably but would you would you agree that for nbfcs as a I mean again it’s not Ln Finance uh per se I mean RB
has come off I mean regulation wise uh they’ve been they’ve been uh coming down on various fronts not just uh you know one line of business would you say growth you said you would like to double your Loan Loan book in the next 3 to 4 years three and a
half to four years yeah so that is slight moderation as compared to what you said earlier which is 25% C right I mean now you’re probably between 15 and 20% correct see the thing is that you know some businesses will grow at a particular speed some businesses will probably go at a lesser
speed and again you calibrate your growth according to the market conditions right so obviously I would not say RBA has been singling out nbfcs RBI has been generally uh and the regulator has been generally sort of of advocating moderation in in certain asset class grosses and growth and it is
across the financial industry segment and I think they’re uh saying that you know uh lend where you think the customer has the capacity to pay and do not lend beyond the customer’s means and also be transparent with the customer when you lend and make sure that no AG practices are
resorted to while lending so I guess it’s a directional guidance to the entire system uh also the RBI wants us to be very very transparent with the customer in terms of pricing and wants to make pricing more reasonable that you might a couple of percentage points might be drawed from there
but I do believe that is good in long-term interest of the but does it does that mean uh in fi25 does that mean say 20% growth for you or 25% will the will difficult to pinpoint whether is 20 to 25% we have said that we will be directionally between 20 to 25% you know and and probably we’ll
land up somewhere between those numbers in that range got that on asset quality so you’re saying that the mfi situation will hopefully resolve itself by the fourth quarter the other area of concern which obviously the RBI flagged off this year was personal Loans and you know
things like Credit cards Etc unsecured lending basically uh what are you picking up uh from the ground on that side of the Portfolio is there any delinquency building up any concern building up over there see the prime personal Loans
Portfolio continues to hold well right we only saw stress in the below 75,000 rupes ticket size right and if you look at the overall distribution of personal Loans in the overall industry right now probably the number will be somewhere between 13 and a half to 14
lakhs of personal Loans the below 75,000 segment I don’t think is more than about one lakh or 1 lak 25,000 1.25 lakh crores odd so it’s a small portion of the Portfolio that has stress and large portion of that stress probably has to a certain extent
flown or it’s it’s like it’s stabilizing in fact if we look at the data I think the entire person Loans uh industry as well as the Consumer Finance industry
has shown some signs of stabilization post September October so I do believe that that industry that particular uh phase is probably over and the industry is moving toward stabilization 3.2% roughly 3.2% is where gross npas were for you at at the last quarter you know percentage is that the peak
does it improve from here on again I’m talking about an outlook for the next couple of quarters not necessarily just this year end see the uh the fact is that we would uh uh so we would like our Credit cost was roughly about 2.5% whatever was our Credit cost
so the fact is that you know uh because the mfi know and we are a very large player in mfi right so even if a 10% dilution in collection efficiency leads to some flows right and because there was some flows in the in in the early part of uh this year which is between April May June right some of
those flows will keep on coming and moving into GS3 and ns3 you know respectively so more or less I do believe that the Credit cost that we have at that particular level we try to stabilize it at this particular level but there might some 10 15 basis points ups and downs for the
next one or two quarters before it sett Downs again very quickly what about Nims what should it look like it came off a little bit on a sequential basis yes the Nim came off a little bit primarily because you know the asset quality the asset mix actually change because we slowed down a little bit
of mfi which is generally a higher product and you know overall your mortgage and lab portion of our book has gone G up so because of the adjustment in the mix of the input products the the sort of the NIMS have moved a bit but whatever what we guided is that we will try to keep our nimon fees
between 10.5 to 11% is what we have guided all right Mr Ro we congratulate you once again uh this is a landmark Milestone uh in that sense and congratulations on the event tomorrow as well right there we are we actually you know we have actually retooled our uh sort of Technology team and we have
one of the best teams we would believe they one of the best teams in the industry in terms of data science and artificial intelligence so what we thought was that as part of our 30-year celebration you know why not have a conference that looks at a is applicability to bfsi real life use cases and
we have the conference tomorrow we got very good response and we hope to have a good good outcome tomorrow absolutely uh congratulations and good luck for that event as well hope to see you tomorrow thank you so much thank you well that is lnt style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance
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