Motilal Oswal's research report on Larsen and Toubro Finance Holdings
L&T Finance Holdings (LTFH) posted a 4QFY22 consolidated PAT of INR3.4b (16% miss). FY22 PAT rose 11% YoY even as the credit costs remained elevated at ~3.6% since LTFH decided to further increase the pandemic management overlay against expectations of utilizing the same in 4QFY22. Loan book started exhibiting growth and stood at INR883b (up 3% QoQ), driven primarily by infrastructure loans and home loans (up 5% QoQ each) as well as MFI loans (up 11% QoQ). The Rural Finance business (particularly Micro and Consumer loans) displayed strength, with monthly disbursement run-rate exceeding pre-COVID levels in 4QFY22.
Outlook
We maintain our BUY rating on the stock with a TP of INR100 (premised on 1.1x FY24E consolidated BVPS).
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