LTF - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | LTF | Market Cap | 67,672 Cr. | Current Price | 270 ₹ | High / Low | 329 ₹ |
| Stock P/E | 21.7 | Book Value | 111 ₹ | Dividend Yield | 1.02 % | ROCE | 8.50 % |
| ROE | 11.8 % | Face Value | 10.0 ₹ | DMA 50 | 281 ₹ | DMA 200 | 264 ₹ |
| Chg in FII Hold | 0.98 % | Chg in DII Hold | -0.42 % | PAT Qtr | 947 Cr. | PAT Prev Qtr | 751 Cr. |
| RSI | 39.2 | MACD | -1.63 | Volume | 72,13,909 | Avg Vol 1Wk | 50,72,860 |
| Low price | 169 ₹ | High price | 329 ₹ | PEG Ratio | 1.10 | Debt to equity | 3.96 |
| 52w Index | 63.0 % | Qtr Profit Var | 50.2 % | EPS | 12.4 ₹ | Industry PE | 18.3 |
📊 Financials: L&T Finance Holdings (LTF) demonstrates steady fundamentals with ROE at 11.8% and ROCE at 8.50%, reflecting moderate profitability. Debt-to-equity ratio of 3.96 is high but typical for NBFCs. EPS stands at ₹12.4, supported by PAT growth from ₹751 Cr. to ₹947 Cr. Quarterly profit variation (+50.2%) highlights strong earnings momentum. Dividend yield at 1.02% provides modest shareholder returns.
💹 Valuation: Current P/E of 21.7 is slightly above the industry average of 18.3, suggesting fair valuation with a premium. P/B ratio (~2.4, 270/111) reflects reasonable pricing relative to book value. PEG ratio of 1.10 indicates growth is fairly priced. Intrinsic value analysis suggests the stock is moderately valued with a balanced margin of safety.
🏢 Business Model & Health: LTF operates in financial services, focusing on retail lending, housing finance, and infrastructure financing. Competitive advantage lies in diversified lending and strong parentage under L&T Group. Moderate profitability, high leverage, and consistent PAT growth support sustainability. Institutional participation is mixed, with FII holdings increasing (+0.98%) but DII holdings declining (-0.42%).
📈 Entry Zone: Technical indicators (RSI 39.2, MACD -1.63, DMA 50 at ₹281, DMA 200 at ₹264) suggest oversold conditions. Accumulation near ₹260–₹275 could be favorable. Long-term investors may hold, given strong fundamentals and sectoral growth outlook.
Positive
- ✅ PAT growth (+50.2%) indicates strong earnings resilience.
- ✅ P/E (21.7) close to industry average (18.3) suggests fair valuation.
- ✅ Dividend yield (1.02%) provides modest shareholder returns.
- ✅ FII holdings increased (+0.98%), showing foreign investor confidence.
Limitation
- ⚠️ ROCE (8.50%) reflects modest capital efficiency.
- ⚠️ High debt-to-equity ratio (3.96) requires monitoring.
- ⚠️ Decline in DII holdings (-0.42%) reflects reduced domestic institutional confidence.
Company Negative News
- 📉 High leverage compared to peers could limit flexibility.
- 📉 DII holdings declined (-0.42%), signaling cautious domestic sentiment.
Company Positive News
- 📈 PAT growth from ₹751 Cr. to ₹947 Cr. shows strong operational performance.
- 📈 FII holding increased (+0.98%), reflecting foreign institutional support.
Industry
- 🌐 Industry P/E at 18.3 indicates moderate sector valuations.
- 🌐 NBFC sector benefits from rising credit demand and financial inclusion initiatives.
Conclusion
🔎 L&T Finance Holdings is fundamentally stable with strong earnings growth, fair valuations, and rising foreign investor support. However, high debt levels and modest ROCE remain concerns. Entry near ₹260–₹275 offers a favorable risk-reward opportunity. Long-term holding is justified, though investors should monitor leverage and institutional sentiment closely.