Hold Larsen and Toubro Finance Holding; target of Rs 88: Sharekhan

Sharekhan recommended Hold rating on Larsen and Toubro Finance Holding with a target price of Rs 88 in its research report dated November 10, 2022.

Broker Research

November 15, 2022 / 18:31 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Sharekhan's research report on Larsen and Toubro Finance Holding

L&T Finance Holdings Limited (L&T Finance) reported PAT at Rs. 406 crore (up 82% y-o-y/55% q-o-q), led by lower credit cost reported at 2.56% annualised (calculated as a % of AUM) vs. 3.63% q-o-q and 3.60% y-o-y as Rs. 422 crore of slippages from retail finance in OTR book were directly written-off from additional contingent provisions. Overall disbursements grew by 51% y-o-y/6% q-o-q, mainly led by robust growth in retail disbursements, up 84% y-o-y/15% q-o-q. Disbursements in the wholesale segment fell by 54% y-o-y/47% q-o-q, in line with its strategy to focus on retail. However, AUM grew by only 4% y-o-y/2% q-o-q. Share of retail assets rose to 58% in Q2FY2023 vs. 48% of total AUM in Q2FY2022. Asset quality was stable with overall GS-3/NS-3 assets at 4.02%/1.85%. PCR on Stage-3 assets was stable at 55% q-o-q. However, write-offs continued to remain higher at 3.7% of AUM.

Outlook

At the CMP, the stock trades at 0.9x and 0.9x its FY2023E and FY2024E BV, respectively. We maintain our Hold rating with a revised PT of Rs. 88.

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