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LTF - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 4.2
📊 Financial Overview
- Profitability: PAT increased from ₹694 Cr to ₹728 Cr QoQ, showing a 5.6% growth. EPS stands at ₹10.7.
- Return Metrics: ROE at 10.8% and ROCE at 8.7% reflect decent capital efficiency for a financial services firm.
- Valuation: P/E of 25.3 is slightly above industry average (22.6), suggesting fair valuation.
- P/B Ratio: With a book value of ₹104 and price of ₹270, P/B is ~2.6, indicating moderate premium.
- PEG Ratio: 0.20 signals strong growth potential at a reasonable valuation.
- Debt Profile: Debt-to-equity ratio of 3.76 is typical for NBFCs and manageable within sector norms.
- Momentum: RSI at 64.2 and MACD at 6.79 suggest bullish sentiment with potential for continuation.
🏢 Business Model & Competitive Edge
- L&T Finance Holdings (LTF) operates as a diversified NBFC with strong presence in retail, rural, and infrastructure financing.
- Backed by the L&T brand, it benefits from trust, scale, and access to low-cost capital.
- Digital transformation and focus on retail lending enhance margins and customer acquisition.
💡 Entry Zone Recommendation
- Current price is near its 52-week high and above both DMA 50 (₹247) and DMA 200 (₹203), indicating strong momentum.
- Suggested Entry Zone: ₹255–₹265 on dips for accumulation.
- Long-term holding is favorable given strong fundamentals and improving profitability.
✅ Positive
- Consistent PAT growth and strong PEG ratio.
- Improving ROE and stable EPS performance.
- FII and DII holdings increased, reflecting institutional confidence.
⚠️ Limitation
- Debt-to-equity ratio is high, typical for NBFCs but worth monitoring.
- ROCE remains modest compared to top-tier financial peers.
- Dividend yield of 1.04% may not appeal to income-focused investors.
📉 Company Negative News
- Trading volume below weekly average may indicate short-term caution.
- Stock is near its 52-week high, limiting immediate upside potential.
📈 Company Positive News
- Strong quarterly earnings and improving asset quality.
- Digital lending and retail focus gaining traction.
🏭 Industry
- NBFC sector benefits from rising credit demand, financial inclusion, and digital adoption.
- Industry P/E of 22.6 supports moderate valuation for growth-oriented players.
🧾 Conclusion
- L&T Finance is a well-positioned NBFC with strong brand backing, improving fundamentals, and digital momentum.
- Entry near ₹255–₹265 offers a favorable long-term opportunity.
- Monitor debt levels and asset quality for sustained performance.
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