L&T Finance Shares Hit 52-Week Low On Reporting IL&FS Exposure

L&T Finance Holdings share price slumped close to 13 percent to hit a new 52-week low of Rs 110.65 a piece despite reporting a strong increase in net profit for the second quarter of 2018-19, today. As per its stock exchange filing, its consolidated net profit increased by 66 percent on year-on-year basis to Rs 560 crore from Rs 338 crore.

In an investor presentation, the company said that its business was scarred by Kerala floods, exposure to IL&FS and default by a real estate company. Its exposure to IL&FS entities was valued at Rs 1,800 crore and that to the defaulter real estate firm, Supertech, is Rs 800 crore.

The company has exposure to 4 annuity projects of ITNL of which 3 are operational and 2 toll road projects (both operational). Dinanath Dubhashi, CEO said, "Out of the total exposure to IL&FS Transportation Network (ITNL) SPVs, Rs 722 crore is domiciled in L&T IDF. These exposures are backed by government guarantees." To further pacify investor concerns, the Dubhashi said the company has thousands of crores in liquid investments and a sanctioned credit line of Rs 6,146 crore from its parent L&T, and banks.

As for its Q2 results, its net interest income was up by 54 percent to Rs 11.26 billion over the same period in the previous year. It has maintained its RoE (return on equity) at the rate of 18.47 percent in the July-Sept 2018 quarter, compared to 18.45 percent in the preceding quarter.