L&T Finance Limited

Dinanath Dubhashi

our MD and CEO to please come on stage and provide us with

rs,

performance, results, analysis, on one side and just the feeling of seeing all of you after two years, on another side, genuinely feeling so good to see all of you safe. Let us also at this time recogniz

25%

ext 4 to 5 years is what we are planning. So, you remember in FY16, our retail share was less than 25% and we said that in our right businesses and right structure part, we will increase retailisation.

50%

r right businesses and right structure part, we will increase retailisation. First, our target was 50% and then we said at least to two thirds we will go. Whenever I was talking, I would say my ambitio

51%

two thirds, I am glad to say that we actually ended March 22 despite COVID, despite everything at 51%. The important thing is in retail this year, FY22, we could disburse close to Rs 25,000 Cr which

Rs 25,000

everything at 51%. The important thing is in retail this year, FY22, we could disburse close to Rs 25,000 Cr which is our highest ever disbursements. The quarter itself, we could disburse little more than

Rs 8,000

Cr which is our highest ever disbursements. The quarter itself, we could disburse little more than Rs 8,000 Cr which is our highest ever disbursements. In some of our businesses, micro loans, we did close to

Rs 4,000

r which is our highest ever disbursements. In some of our businesses, micro loans, we did close to Rs 4,000 Cr this quarter which is again our highest ever disbursement. Two wheelers and Farm, we have not on

Rs 800

ing. Home loans, after losing ground, we are again gathering speed and we have disbursed close to Rs 800 Cr this quarter. We understand that it is very small, but we believe we have found the formula, we

Rs 7

gnify? Ability to come quickly out of big problems. I remember first quarter of FY21, we disbursed Rs 7 Cr; first quarter of FY22 we disbursed Rs 100 Cr, Rs 200 Cr something like that, very low number an

Rs 100

oblems. I remember first quarter of FY21, we disbursed Rs 7 Cr; first quarter of FY22 we disbursed Rs 100 Cr, Rs 200 Cr something like that, very low number and we have shown the ability to quickly recover

Rs 200

remember first quarter of FY21, we disbursed Rs 7 Cr; first quarter of FY22 we disbursed Rs 100 Cr, Rs 200 Cr something like that, very low number and we have shown the ability to quickly recover to this.

7.84%

hat one small line of retail at all time high disbursements of Rs 25,000 Cr show. NIMs, NIMs are 7.84% for the year, 8.17% for quarter. I remember those times that I was guiding you around 6.5% to 7%.

“Having said that, obviously the question will be that look, you told this strategy, but these are the few things which went wrong, so why should we believe what you are going to talk today?”

“There, my only request will be, give us a patient listening today, we will talk primarily about what my team has been doing for the last 6 years, what are the strengths we have developed and how in the next 4 to 5 years, we are going to use these strengths and accelerate tremendously as we go ahead.”

“First, our target was 50% and then we said at least to two thirds we will go.”

“We understand that it is very small, but we believe we have found the formula, we have found the mojo and from here it will be only growth.”

“One, ~Rs 25,000 Cr disbursement overall retail, good number, we have shown the ability to grow, to grow in bad markets and hence the confidence that we will grow further.”

“We took the call and I must admit, there was no great scientific reason on that call, it is just showing cautiousness, caution that with COVID cases going up again, we do hope certainly that this will be like the Q3.”

“Proud of the liability strength that we have created and last but not the least digital and data analytics and we will be talking much more about that as we go ahead.”

“The target my team has is a good customer, never should get an NOC from us, in a way that you should always have and we will know, it is not the question of overborrowing, overleveraging, that is silly because analytics will show very clearly whether it is overleveraging or not, but very clearly if the customer is going from us to someone else, we should not allow.”

“We definitely plan to become one, not copying but taking inspiration from what this brilliant peer has done and finding our own way, perhaps unique way of becoming a Fintech@Scale.”

“This is what we intend to achieve by 2026: • Retail at 80% of the balance sheet and it says greater than 80%, minimum 80% • Retail CAGR of 25% and we are talking CAGR, hopefully we will achieve it every year, but yes, as I said one year COVID and this and that may be there, we will make sure that 25% CAGR is achieved • Achieve this at an excellent asset quality, try and keep our NS3 at less than 1% always and • Get back to ROAs of close to 3%.”

Dinanath Dubhashi

12

Moderator

4

Nischint Chawathe

4

Rikin Shah

2

Aditya Jain

2

The fourth Vector is Channels

1

Third party partners and field agents

1

Ecosystems

1

This is the time that I should summarize

1

Sarath Chandra

1

Dinanath Dubhashi

Thank you, Karthik. A very good morning and thank you to all of you. I think before I start my presentation, the first feeling, performance, results, analysis, on one side and just the feeling of seeing all of you after two years, on another side, genuinely feeling so good to see all of you safe. Let us also at this time recognize the tremendous efforts put by workers in the industry, forget just L&T Finance, over the last 2 years. Just imagine that we are all meeting and feeling good after meeting after so long, these are the people who have been toiling on the field and also taking care of themselves, taking care of their family and still making sure that results are delivered, so my thank you to all of them. Today, 2nd May 2022, I remember a day just one short of 6 years back which was 3rd May 2016, when I stood on a similar stage in some other hotel and presented the strategy what later became LTFS 2.0. Many of you were there, my management was there, I was there, yes, we have chan

The fourth Vector is Channels

Today, we are a very point of presence or point of sales-oriented Company. We are very strong in dealerships. We are very strong in visiting the customer’s house and lending there, collecting there. We are now using the strengths that we have built in digital and analytics to make sure that we do geo-agnostic sourcing, use digital and use analytics to deepen the understanding of the customer and open up more and more channels for the customer. I will demonstrate some of this, but for now, be suffice in saying that we will not be only branch based, we can approach the customer through Chatbot, through WhatsApp, through web, through apps and ultimately through an ecosystem and that is the whole power of channels that we are unleashing. So, the first power that we are unleashing is Cross-Sell and Up-Sell; second, Geo expansion; third is Channels and the fourth is New Products. Growth Vectors (6/6), Product expansion keeping customer at core May 2, 2022 The first line is clearly the existi

Third party partners and field agents

Now what is important for field agency. Field agents, all have, so what is it? I am going to demonstrate an app which is used by my micro loans or microfinance field agents which is about capturing details of the customer, which is about income generation or income estimation and more importantly, it is about collections and within collections, even more importantly, it is about customer location. In microfinance, we have close to 15,000 people. At the feet on street, it has tremendous level of attrition. My first problem when a new person joins, is where the May 2, 2022 customer resides, because address is in the rural, behind Hanuman mandir and if that village has two Hanuman mandir we are finished and back side meaning you don’t exactly know where, right, can we exactly locate that customer, even more importantly, can we give our most efficient route map to my person. Basically, can we make sure that my person’s life becomes easy, productivity increases through the roof and without

Ecosystems

Right now, we are all doing our own sourcing, how can we source through ecosystems, I am not necessarily talking about the bank bazaar and loan bazaar kind of ecosystems, but can we have people who are doing their own work, can we get the data from them, can we use that to use to source. What are the different types of ecosystems, e-aggregators which is the e-aggregators which all know about, our partners and third party products, can we use our entire marketing cloud and we can, I am sure, one, having a complete live link with this, so for example, if you are taking admission in say Aakash or somebody like that, while you are filling up your admission form, how can data come to us and we can drop off, to a certain criteria it will be preapproved any way, but beyond that how can we drop the offer, can we drop our next best offer, if that person is not completely qualified, these kind of things moving around and doing it on a completely integrated way, this is what I was talking about t

This is the time that I should summarize

Lakshya, we want to be totally digitally enabled, we want to become a retail Company, focus totally on customer, going beyond the product focus that we have. We are going to achieve through 4 major initiatives, one, obviously business which is a sustainable profitability and growth engine, second is futuristic risk management, third is becoming and launching various tools to become a FinTech@Scale and last, but not the least making this all sustainable through ESG. Specifically talking about the first, we are one vector working today, 1.5 may be which is product excellence and may be half of cross sell unleash 5 vectors which is product, cross sell, geographic expansion, different channels, especially digital channels and new products. Through this, achieve and make sure that we achieve the goals that we have set forth. We have used our digital and data analytics for internal excellence, for operational excellence, for operational efficiency till now largely, unleash it now for determi

Sarath Chandra

Mr. Dubhashi, this is Sarath Chandra, investment advisor, 5 years back in the same hall we met, you gave a long presentation and I will just like to open that presentation, slide number 4 and in that slide number 4, you had promised 5 years down the road, you will transform, improve ROE, focus on growth which you have obviously delivered on cost income ratio, etc., rural business, housing business, wholesale business, investment management, wealth management, so on and so forth, 5 years have passed, ROE has come 50% down, stock prices also come down. Five years back, I had got some confidence from your talk, but today you are giving me a new hope, Lakshya, 5 years later on, I don’t know whether I will still be in that business, because I am already old, so I hope after 5 years we will not be disappointed again the way we are disappointed after few years. Thank you very much.