Shares of L&T Finance Holdings (LTFH) hit a 52-week high of Rs 98.25, surging 6% on BSE in intraday trade on Monday after the company reported solid earnings for the October-December quarter (Q3FY23). Its net profit rose 39% year-on-year to Rs 454 crore.

The stock of Larsen & Toubro (L&T) group investment company surpassed its previous high of Rs 96.35, touched on December 15, 2022. In the past three months, it has gained 28% compared to a 4% rise in the S&P BSE Sensex.

The company’s after-tax retail profit rose 76% year-on-year to Rs 394 crore on solid retail return on assets (RoA), reaching 2.6% in Q3FY23. The retail portfolio currently accounts for 64% of total loans. The company said it recorded its highest-ever quarterly retail spend under Lakshya 2026 and gained momentum to become a customer-focused retail finance company.

Net interest margin (NIM) plus expenses increased to 8.8% in the December quarter, up 70 basis points from a year earlier. The NIM plus margin for the September quarter was 8.43%. They improved despite higher funding costs in the third quarter.

Also, its gross non-performing assets (GNPA) fell to 4.21% in December 2022 from 6.69% a year ago. Net NPA also fell from 3.17% in December 2021 to 1.72% in December 2022.

“Following the divestiture of the mutual fund business, LTFH proposes to merge its affiliated lending entities – L&T Finance and L&T Infra Credit. This will result in a simple and unified structure, allowing for optimal capital utilisation and efficient management bandwidth. The merger will gain the necessary statutory/regulatory approval,” the company said in a statement.

Spending by microfinance institutions (MFIs), home loans and consumer businesses improved in that order. The company has successfully completed the sale of its mutual fund business. While it has accelerated the sell-off in its wholesale business, its retail loan book has started to grow strongly.