The independent financial analyst theScreener just allocated a lower risk rating to L&T FINANCE HOLDINGS (IN), active in the Speciality Finance industry. As regards its fundamental valuation, the title still shows 3 out of 4 possible stars. Its market behaviour, however, has slightly improved and can be qualified as moderately risky. theScreener considers that these elements merit an overall rating upgrade to Neutral. As of the analysis date March 25, 2022, the closing price was INR 83.20 and it...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
L&T FINANCE HOLDINGS: Transient impact of COVID 2.0; recovery held up well in Jun’21 (LTFH IN, Mkt Cap USD3b, CMP INR91, TP INR110, 22% Upside, Buy) LTFH reported a 1QFY22 PAT of INR2.7b (35% miss). Additional COVID-19 provisions stood at INR3.7b in 1QFY22. It further restructured INR9.8b under OTR 2.0. While NII was broadly in line, lower other income, and higher opex (up 31% YoY) led to a PAT miss. Loan book fell ~11% YoY in 1QFY22, driven by a QoQ decline in Micro loans, 2W finance, a...
(LTFH IN, Mkt Cap USD3.3b, CMP INR118, TP INR145, 23% Upside, Buy) Stable across parameters; earnings largely unchanged** LTFH reported 3QFY20 PAT of INR5.9b (+2% YoY), in line with our estimate of INR6.0b. The quarter was characterized by early teens loan growth across focused segments, stable asset quality and core RoE of ~16%. ** We largely maintain our earnings estimates. LTFH is expected to report moderate loan growth (7-8%), dragged by the defocused and wholesale book. With stability on ...
L&T FINANCE: Focus on raising the retail lending share; Valuations attractive at 1x BVPS (LTFH IN, Mkt Cap USD2.9b, CMP INR108, TP INR130, 21% Upside, Buy) L&T Finance Holdings (LTFH) has grown its rural finance book ~2.5x over the past 2.5 years to INR270b. A key driver of growth has been microloans, which now comprises nearly half of rural loans. Consequently, the share of this business in the total segment is up from 15% to 27% over the same time period. CRISIL rated the company 'AAA...
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...
&T FINANCE HOLDINGS (GROUND REALITY): Analyzing trends in rural lending; Tractor demand in East India subdued; Incrementally cautious in microfinance L&T Finance Holdings (LTFH) organized an analyst visit to Burdwan and nearby areas in West Bengal with special focus on its rural lending business (tractor finance, two-wheeler finance and microfinance). The tractor finance market in East India has seen some reshuffling in the past 1-2 years with a few competitors having to slow down and others...
L&T FINANCE HOLDINGS: Slowing growth; marks down 50% of specific HFC exposure (LTFH IN, Mkt Cap USD3.1b, CMP INR108, TP INR140, 30% Upside, Buy) 1QFY20 PAT was largely flat YoY/QoQ at INR5.5b (in-line). The quarter was characterized by slowdown in loan growth, interest write-backs, and increased credit costs due to a one-time provisioning. LTFH marked down 50% of its INR5.7b exposure to a particular HFC, which is now rated D. This led to a sharp increase in credit costs (INR5.8b v/s INR...
L&T Finance Holdings: Steady quarter; ‘Retailization’ theme continues (LTFH IN, Mkt Cap USD3.8b, CMP INR131, TP INR170, 30% Upside, Buy) 4QFY19 PAT almost doubled YoY to INR5.5b, 7% below our estimate. The company reversed INR840m of interest income on ‘amber’ IL&FS accounts, leading to the PAT miss. Adjusting for this, PAT would have beaten our estimate by 2%. The focused loan book grew 5% QoQ/ 17% YoY to INR983b driven by strong growth in rural and housing finance. Over the past four quar...
L&T FINANCE HOLDINGS (GROUND REALITY): Assessing the NCR real estate market; End-consumer demand stable; Inventory overhang steadily declining L&T Finance Holdings (LTFH) organized an analyst visit to Noida with special focus on the key projects of Supertech that the former has funded. We visited two of the three projects funded by LTFH. Key takeaways: Over the past four quarters, there has been a meaningful reduction in inventory overhang for mass housing projects. For example, inventor...
L&T Finance Holdings: Performance encouraging; Outcome of IL&FS saga key monitorable (LTFH IN, Mkt Cap USD3.8b, CMP INR137, TP INR185, 35% Upside, Buy) L&T Finance Holdings’ (LTFH) 3QFY19 PAT grew 81% YoY to INR5.8b, in line with our estimate, driven by strong AUM growth (+23% YoY), ‘retailization’ of the balance sheet, and improving asset quality. The company managed its liquidity situation well with a positive ALM gap of INR60b+ in a stress case scenario as on 31st Dec’18. LTFH has cas...
L&T Finance Holdings: 2Q performance robust; Asset quality trends to be key monitorable (LTFH IN, Mkt Cap USD3.2b, CMP INR117, TP INR175, 50% Upside, Buy) L&T Finance Holdings’ (LTFH) 2QFY19 PAT grew 66% YoY to INR5.6b, in line with our estimate. The quarter was marked by a strong AUM growth (+24% YoY), ‘retailization’ of the balance sheet and improving asset quality for LTFH. LTFH’s focused loan book grew 6% QoQ/26% YoY to INR900b. The growth across segments was similar to that in the p...
L&T Finance Holdings: Core business robust; Provisioning hit of INR18b (pre-tax) taken directly to reserves (LTFH IN,Mkt Cap USD5b, CMP INR171, TP INR240, 41% Upside, Buy) L&T Finance Holding's (LTFH) 1QFY19 PAT grew 71% YoY to INR5.4b (our estimate under IGAAP was INR4.1b), driven by strong AUM growth (+27% YoY) and flat credit costs during the quarter. Focused loan book grew 27% YoY to INR854b, driven by YoY growth of 76% in rural lending, 48% in housing finance and 7% in wholesale le...
L&T Finance Holdings: Adhering to 18%+ RoE guidance by FY20 despite capital raise (LTFH IN, Mkt Cap USD5.5b, CMP INR177, TP INR240, 36% Upside, Buy) L&T Finance Holding’s (LTFH) 4QFY18 PAT grew 29% YoY to INR4.1b (8% above estimate), driven by higher-than-expected PPoP and lower provisions. Rural business: Disbursements remain on a robust trajectory, driven by all segments, especially microfinance. The microfinance book now stands at INR75b, making LTFH among the largest MFI entities in...
L&T Finance: Well capitalized for growth; ~15% accretion to BVPS on account of recent capital infusion (LTFH IN, Mkt Cap USD5.3b, CMP INR170, TP INR240, 41% Upside, Buy) L&T Finance (LTFH) recently raised equity capital amounting to INR30b, of which INR20b came from the parent (L&T). As a result, leverage has declined from previous elevated levels of ~8.5x to ~6.1x now. We believe LTFH is now well capitalized for growth, and will not need to raise equity capital at least in the next 3-4 ...
​L&T Finance Holdings: Strong performance continues(LTFH IN, Mkt Cap USD5.7b, CMP INR199, TP INR240, 21% Upside, Buy)L&T Finance Holding’s (LTFH) 2QFY18 PAT grew 45% YoY to INR3.6b (12% above estimates). Robust core disbursement growth of 81% YoY (excluding IPO financing, which is more opportunistic), a pick-up in fee income across lending segments and a low tax rate were the key highlights of the quarter. Rural business: There was a clear uptick in disbursements in all segments, including m...
​L&T Finance Holdings: Strong fee income traction; meaningful asset quality improvement(LTFH IN, Mkt Cap USD4.6b, CMP INR163, TP INR200, 24% Upside, Buy)L&T Finance Holding’s (LTFH) 1QFY18 PAT grew 49% YoY to INR3.09b. Robust core disbursement growth of 95% YoY, strong fee income across all lending segments, sharp reduction in the GNPL ratio and shoring up of the provision buffer were key highlights of the quarter. Rural business: 2W/tractor disbursements increased 82%/169% YoY. While such s...
​L&T Finance Holdings (initiating coverage): Focused approach; Strong execution toward stated goals to boost profitability(LTFH IN, Mkt Cap USD4.1b, INR150, TP INR180, 20% Upside, Buy)L&T Finance Holdings (LTFH) is a quintessential turnaround story, in our view. From a company with 20+ product lines and sub-standard return ratios, it is gradually transforming itself to a focused financier with eight product lines across three verticals, with a target to achieve 18-20% RoE by FY20 (~12% in FY17...
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