MOSL: L&T FINANCE HOLDINGS (Buy)-Disbursements calibrated-asset quality largely stable
L&T FINANCE HOLDINGS: Disbursements calibrated; asset quality largely stable
(LTFH IN, Mkt Cap USD2.4b, CMP INR87, TP INR120, 38% Upside, Buy)
- LTFH reported a decent second-quarter performance amidst the tough economic environment. PAT (excluding one-off items) grew 16% YoY to INR6.5b (7% ahead of our estimate). LTFH, however, took a one-time hit of INR4.7b on profits from DTA revision DTA under the new tax regime.
- Overall focused book disbursements declined 12% YoY to INR98b, driven by lower real estate and infra disbursements. Rural disbursements were in line with past trends. As a result, the share of rural lending in the total loan book increased 300bp YoY to 27%.
- While overall loan growth came in at 10% YoY, the 'focused' book growth was strong at 19% YoY. While management expects 2HFY20 to be relatively slower in retail lending, it expects a pickup from FY21 onwards.
L&T Finance Holdings Limited is a non-banking financial institution-core investment company. The Company's segments include Retail and Mid Market Finance, which consists of rural products finance, personal vehicle finance, microfinance, housing finance, commercial vehicle finance, construction equipment finance, loans and leases and loan against shares; Wholesale Finance, which consists of project finance and non-project corporate finance to infra and non-infra segments across power-thermal and renewable; transportation-roads, ports and airports; telecom, and other non-infra segments; Investment Management, which consists of assets management of mutual fund and private equity fund, and Other Business, which consists of wealth management and financial product distribution. It offers a range of financial products and services across retail, corporate, housing and infrastructure finance sectors, as well as mutual fund products and investment management services.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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