Buy Larsen and Toubro Finance Holding : target of Rs 100: Sharekhan

Sharekhan's research report on Larsen and Toubro Finance Holding

L&T Finance Holding Limited (LTFH) posted PAT of Rs. 341 crore, up 28% y-o-y and ~10% q-o-q in Q4FY2022 versus street’s expectations of Rs. 400 crore due to muted operating performance. NII fell by ~14% y-o-y and was flat sequentially because of moderate loan book growth. Asset quality improved significantly q-o-q. GNPA stood at 3.8% in Q4FY2022 versus 5.9% in Q3FY2022. Management has put forward its Lakshya 2026 goals, including growing retail to more than 80% of the balance sheet, plans to generate >25% CAGR retail growth, better asset quality with GS3 <3% and NS3 <1%, and RoA of 2.8% to 3%.

Outlook

The stock trades at 0.9x/0.8x its FY2023E/FY2024 book value. We maintain Buy with a revised PT of Rs. 100.