February 15, 2017 / 13:40 IST
L&T Finance Holdings (LTFH), in Q3, remained focused on its broader business strategy to expand RoE which increased 352bps YoY to 12.8%. While loan growth was slower at 10% than the usual run-rate, the company reported good set of numbers with net interest income and net profit grew by 16% and 32%, respectively, aided by 500bps YoY decline in cost-income ratio.
Outlook
Going ahead, with continued efforts on reducing the defocused book and growing the core segments (rural, housing and wholesale), we expect 24% loan book CAGR over FY16-19E with return ratios improving to 1.78% RoA and 17.6% RoE by FY19E. We maintain our Buy rating with a target price of Rs 128 on SOTP basis (core business - 2x Sept’18 ABV and ₹22 for investment and wealth businesses).
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