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    HomeBusinessBroker’s Call: L&T Finance Holdings Ltd (Buy)

    Broker’s Call: L&T Finance Holdings Ltd (Buy)

    -

    Stocks

    LKP Securities

    Target: ₹110

    CMP: ₹76.05

    L&T Finance Holdings is on track to accomplish its LAKSHYA 2026 goals of retailisation (80 per cent contribution) with retail growth of about 25 per cent CAGR. The defocused business (Infra bond + CRE) contributes insignificant portion of 1.7 per cent of the book. The company is establishing strong market position across businesses with a granular customer base of more than 20 million.

    The company witnessed its highest-ever quarterly and yearly disbursement in Q4-FY22 which led to growth of 42 per cent year-on-year in FY22 to ₹24,900 crore.

    In FY22, the company’s long-term bonds upgraded from AA+ rating to AAA. A rating upgrade has resulted in lowest-ever weighted average cost of funds in FY22 at 7.3 per cent. L&TFH is consistently maintaining an ALM surplus of less than one-month surplus of ₹32,100 crore Its asset quality has improved despite pandemic. The company has additional provision of ₹2,350 crore (2.85 per cent of total standard assets). The overall loan book to grow at 11 per cent CAGR for FY22-24; a PAT growth of 54 per cent year-on year in FY23 and 24 per cent for FY24 to translate in ROA of 1.6 per cent in FY24.

    Published on June 07, 2022

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