L&T Finance Holdings share price plunges 13% despite strong Q2 results; IL&FS concerns at play?

L&T Finance Holdings share price: Shares of NBFC firm L&T Finance Holdings plunged on Thursday, despite the firm reporting stellar Q2 results, however, business was affected by exposure to IL&FS in the latest quarter. LTFH noted that four issues including Kerala deluge, Infrastructure Leasing & Financial Services (IL&FS), rumors of Supertech default and prevailing liquidity position affected the industry in Q2FY19. Notably, L&T Finance Holdings share price plunged by more than 12.6% intra-day to hit fresh 52-week low of Rs 110.65 on NSE this afternoon. In the latest quarter, L&T Finance Holdings has reported a 65% rise in net profit to Rs 560 crore from Rs 338 crore a year earlier.

Net interest income came in at Rs 3,246.30 crore, up from Rs 2,383.82 crore. Average assets under management in the investment management business increased 40% on-year to Rs 73,754 crore. For L&T Finance Holdings exposure to IL&FS’ related entities stands at Rs 1,800 crore and to defaulter real estate firm Supertech stood at Rs 800 crore, the company said. However, Dinanath Dubhashi, CEO of L&T Finance said that 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,” he added.

The financial stocks have been reeling under pressure especially after concerns of increasing defaults. Earlier this week, the newly constituted board of Infrastructure Leasing and Financial Services (IL&FS) said it has appointed three advisors to formulate and execute a resolution plan for the debt-ridden company. Arpwood Capital and JM Financial have been appointed as the financial and transaction advisors (FTAs), while Alvarez and Marsal (A&M) as the restructuring advisor to the company’s board, according to a release by the firm.

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