LTF - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: L&T Finance Holdings (LTF)

Investment Rating: 4.2

LTF presents a moderately attractive long-term investment opportunity, supported by improving profitability, a low PEG ratio, and decent dividend yield. However, its high debt-to-equity ratio and modest ROCE suggest caution and selective entry.

✅ Why It’s a Candidate for Long-Term Investment

Valuation

Stock P/E (19.4) is below Industry P/E (25.2) → undervalued relative to peers.

PEG Ratio (0.42) → indicates strong earnings growth at a reasonable price.

Price-to-Book (P/B ≈ 2.02) → fair valuation given sector norms.

Profitability & Growth

ROE (10.8%) and ROCE (8.71%) → modest but improving.

EPS (₹10.7) and PAT growth (2.28% QoQ) → consistent earnings.

Dividend Yield (1.33%) → adds passive income potential.

Technical Indicators

RSI (54.2) → neutral zone, not overbought.

MACD (3.08) → bullish crossover suggests upward momentum.

Volume is healthy, though slightly below weekly average → stable interest.

🎯 Ideal Entry Price Zone

Based on DMA and support levels

Entry Zone: ₹185–₹195

₹195 is the 50 DMA, often a strong support.

₹171 is the 200 DMA, a deeper value zone for accumulation.

Avoid entry near ₹215 (52-week high) unless momentum confirms breakout.

🧭 Exit Strategy / Holding Period

If you already hold LTF

Holding Period: Minimum 2–3 years to benefit from compounding ROE and PEG-driven growth.

Exit Strategy

Partial Exit near ₹215–₹220** if price approaches resistance and valuation stretches.

Full Exit if ROCE stagnates or debt-to-equity worsens beyond 4.0.

Trailing Stop Loss: Consider placing it around ₹190 to protect gains.

⚠️ Risks to Monitor

Debt-to-Equity (3.61) → high leverage; monitor for deleveraging progress.

ROCE < 10% → indicates capital efficiency needs improvement.

FII/DII Holding Changes → positive but modest; institutional conviction still building.

Would you like a comparison with similar NBFCs or a dividend-focused alternative?

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