Buy L&T Finance Holdings; target of Rs 235: JM Financial

JM Financial is bullish on L&T Finance Holdings has recommended buy rating on the stock with a target price of Rs 235 in its research report dated 05 December 2017.

January 08, 2018 / 13:50 IST

26 Aug, 2025 12:21

Volume

Todays L/H

JM Financial's research report on L&T Finance Holdings

Over the past month, LTFH ’s stock price has corrected by 23% and we believe the CMP provides an attractive entry point due to : i) Improving RoE trend s - profitability over the last 6 quarters has improved with reported ROE improving from 9.7% in to 1 5 . 2 % despite the company providing for voluntary provisioning of INR 8.9bn and accelerated provisioning of INR 5.3bn ; ii) While PSU banks ’ recap would increase competitive intensity in infrastructure/LAP , LTFH would benefit from the increase in down - selling opportunities ; and iii) The company has hired senior staff from Bajaj Finance and Piramal Finance for its credit analytics and housing team.

Outlook

We expect strong earnings (37% CAGR over FY17 - 20E) and expect RoA/RoE to improve to 2.1%/21%, respectively, in FY20E vs. 1.35%/12% in FY17. We value LTFH at 3.4x Mar’20, a implying Mar’19 TP of INR 235.For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.