Motilal Oswal's research report on Larsen and Toubro Finance Holdings
L&T Finance Holdings’ (LTFH) 2QFY19 PAT grew 66% YoY to INR5.6b, in line with our estimate. The quarter was marked by a strong AUM growth (+24% YoY), ‘retailization’ of the balance sheet and improving asset quality for LTFH. LTFH’s focused loan book grew 6% QoQ/26% YoY to INR900b. The growth across segments was similar to that in the prior quarters – 71% YoY in rural finance, 40% YoY in housing finance and 8% YoY in wholesale finance. LTFH’s microfinance book has now crossed the INR100b mark.
Outlook
Key risks to our estimates stem from any change in regulatory norms for NBFCs. Our TP of INR175 is based on 2.0x Sep 2020E BVPS.
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