How clear thinking has helped Dubhashi turn around L&T Finance

Updated: Sun, Oct 01, 2017
09:39 am
PTI
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From being an almost crippled player with low RoE and plenty of bad-press till two years ago to one of the top five NBFCs now, L&T Finance has come a long way, thanks to the turnaround plan sewed up by the new management under chief executive Dinanath Dubhashi.

In short, the financial services arm of engineering giant Larsen & Toubro had badly missed the bus and the bull- run that the industry had till last year, but fortunately moved up the ladder in the past six quarters.

Today, L&T Finance Holdings is among the top five NBFCs with high return of equity (RoE) and one of the best in terms of asset quality and is among the top NBFCs in terms of market capitalisation.

"To begin with we decided to be a pure-play NBFC as we were confused whether we are an NBFC or a bank. So, we'd to get the right business plan with the right structure in place that means less complexities, the right execution and the right people. To get this moving we had to ensure there's no room for anyone to blame the externalities for their failures.

"So as I started off, I stuck my neck out and said we'll achieve the top quartile RoE by 2020 offering 18-20 per cent by 2020. I'm happy today that we'll be able to achieve this one full year in advance," is how Dubhashi recalls the course correction he undertook since taking over in July 2016 as the managing director & chief executive, though the turnaround plan was rolling from April 2016.

The focus was on three-four things from beginning -- the right cost structure, getting the right people in and wrong people our and right product and execution strategies.

"First of all, we'd a very heavy cost structure, which was eating into our nimbleness. As an NBFC, we'd to be nimble and fast. Then we'd a laundry list of 20-odd products earlier.

To trim them to a sensible level was a key target and so we slashed them to just five now," Dubhashi tells

 

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)