Buy Larsen and Toubro Finance Holdings; target of Rs 110: Geojit

Geojit's research report on Larsen and Toubro Finance Holdings

L&T Finance Holdings Ltd (LTFH) offers financial products and services in the corporate, infrastructure and retail finance spaces, as well as fund products and investment services. In Q3FY23, the company’s net interest margin (NIM) + fees margin improved to 8.80% on account of highest ever quarterly retail disbursement and prudent asset-liability (ALM) management. Retail mix stood at 64% vis-à-vis 58% in Q2FY23 and 50% in Q3FY22. The company also accelerated the sell-off of the wholesale and other noncore businesses.

Outlook

Increased retail push will drive growth over the long term, supported by yield improvement owing to rising policy rates. Maintaining a positive outlook on the company’s long-term performance, we retain our BUY rating on the stock with a rolled forward target price of Rs. 110 based on 1.1x FY25E BVPS.

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