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L&T Finance
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L&T Finance Share price and Fundamental Analysis
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Company History
L&T Finance Holdings Ltd. (LTFH) is a financial holding company offering a focused range of financial products and services across rural, housing and wholesale finance sectors, as well as mutual fund products and wealth management services, through its wholly-owned subsidiaries, viz., L&T Finance Ltd., L&T Housing Finance Ltd., L&T Infrastructure Finance Company Ltd., L&T Investment Management Ltd. L&T Capital Markets Ltd. and L&T Infra Debt Fund Ltd. LTFH is registered with RBI as a CIC-ND-SI. LTFH is promoted by Larsen & Toubro Ltd. (L&T), one of the leading companies in India, with interests in engineering, construction, electrical & electronics manufacturing & services, IT and financial services.
LTFH' s wholesale finance business comprises infrastructure finance, structured corporate finance and supply chain finance. The company also offers debt capital markets services as part of its wholesale finance business segment. The company's housing finance business comprises home loans and loans against property, and real estate finance. The company's rural finance business comprises farm equipment finance, two wheeler finance and micro loans.
L&T Finance Holdings Ltd was incorporated on May 1, 2008 as a public limited company with the name L&T Capital Holdings Ltd. The company was promoted by Larsen & Toubro Ltd as a holding company for their financial services business. In May 15, 2008, the company received the Certificate of Commencement of Business.
In March 31, 2009, Larsen & Toubro Ltd's investment in L&T Finance Ltd, L&T Infrastructure Finance Company Ltd and India Infrastructure Developers Ltd were transferred to the company and hence, L&T Finance Ltd, L&T Infrastructure Finance Company Ltd and India Infrastructure Developers Ltd became the wholly owned subsidiaries of the company.
In January 20, 2010, the company's wholly owned subsidiary L&T Finance Ltd acquired L&T Investment Management Ltd (formerly DBS Cholamandalam Asset Management Ltd) and L&T Mutual Fund Trustee Ltd (formerly DBS Cholamandalam Trustee Ltd), the trustee company for L&T Mutual Fund.
In September 1, 2010, the company changed their name from L&T Capital Holding Ltd to L&T Finance Holdings Ltd.
In 2011, L&T Finance Holdings' total assets crossed Rs 20000 crore mark. During the year, company entered the capital market with its maiden initial public offer.
In 2012, L&T Finance Holdings' total assets crossed Rs 30000 crore mark. During the year, the L&T Finance Holdings forayed into housing finance business with the acquisition of Indo Pacific Housing Finance Ltd (IPHF). During the year, L&T Finance Holdings' mutual fund unit acquired Fidelity's mutual fund business in India. During the year, the company started two-wheeler financing with its acquisition of Family Credit, a non-banking finance company.
In 2013, L&T Capital Markets was incorporated as a Platform for Wealth Management business. During the year, L&T Finance Holdings launched a maiden issue of preference shares.
In 2015, L&T Finance Holdings' total assets crossed Rs 50000 crore mark. During the year, the company raised Rs 708 crore from preferential issue of Equity Shares and Warrants to Bain Capital. In 2016, L&T Finance Holdings re-oriented its strategy to focus on select products and deliver improvement on Return on Equity (RoE).
In 2017, L&T Finance Holdings expanded its footprint by commencing Micro loans business in Assam. During the year, its mutual funds business crossed the Rs 50000 crore Assets Under Management (AUM) mark. During the year under review, L&T Access Distribution Services Limited, wholly owned subsidiary of the Company was merged with L&T Capital Markets Limited, another wholly owned subsidiary of the Company with effect from November 10, 2017.
On 8 March 2018, L&T Finance Holdings Limited (LTFH) announced that it has completed the preferential allotment to Larsen & Toubro Limited (the Promoter), of 10.78 crores equity shares at issue price of Rs. 185.51 per share. Through this issue, the Promoter has infused additional capital amounting to Rs 1999.99 crore demonstrating their belief and commitment to the LTFH growth story. The capital infused by the Promoter will help fund the growth of LTFH's focused lending businesses - rural finance, housing finance and wholesale finance, and further strengthen the capital adequacy of the company.
On 13 March 2018, L&T Finance Holdings Limited (LTFH) announced the successful closure of its Qualified Institutional Placement (QIP) of upto Rs 1000 crore at the issue price of Rs 158.60 per share. The capital raised will be used for business growth. On 20 June 2018, L&T Finance Holdings (LTFH) through its subsidiary L&T Finance (LTF) announced the opening of its 1000th meeting center in Kolkata, West Bengal, for its micro loans business. Furthermore, the company has launched an app, which would enable seamless customer on-boarding by providing instant loan sanctioning. The micro loans business has an end-to-end digital platform, embedded with a range of services such as loan sanctioning, group formation, e-signing, receipting, risk audits etc.
The Company had allotted 6,38,20,990 Warrants with each Warrant convertible into one Equity Share of the face value of Rs 10 each at a price of Rs 74 per Warrant to BC Asia Growth Investments (Investor) on December 18, 2015 on a preferential basis. The Company had received 25% upfront money of total consideration from the Investor at the time of allotment of Warrants and balance 75% was received at the time of exercise of notice for option to convert the Warrants. Pursuant to the said conversion of Warrants, the Company has allotted 6,38,20,990 Equity Shares of face value of Rs 10 each to Investor on May 17, 2017. Further, the Company also allotted 6,30,51,702 Equity Shares of Rs 10 each at an issue price of Rs 158.60 to the eligible qualified institutional buyers on a private placement basis under Chapter VIII of SEBI ICDR on March 15, 2018.
During the year 2019-20, the Company and L&T Capital Markets Limited (LTCM), the wholly owned subsidiary of the Company had entered into a Share Purchase Agreement with IIFL Wealth Finance Limited and IIFL Wealth Management Limited, where the Company sold 100% investment in LTCM to IIFL Wealth Finance Limited on April 24, 2020, and accordingly, LTCM ceased to be a subsidiary of the Company.
During the year 2019-20, Company had issued 8,74,10,000 CCRPS of face value Rs. 100 each for cash at par aggregating to Rs. 874.10 Crore on a private placement basis which were subsequently listed on BSE Limited in accordance with the Securities and Exchange Board of India. 1,84,40,000 CCRPS amounting to Rs. 184.40 Crore, which were due for redemption were redeemed by the Company. The Company had infused capital in L&T Infrastructure Finance Company Limited and L&T Capital Markets (Middle East) Limited during FY 2019-20.
During year 2020-21, the Company met its funding requirements through issuance of NCDs (private placement basis), CPs, Inter Corporate Deposits (ICDs) and borrowings from banks. The aggregate debt outstanding as on March 31, 2021 was Rs. 79,390.18 Crore. The Company's AAA rating was reaffirmed by all four rating agencies, CRISIL, CARE, India Ratings and ICRA. Also in August 2021, ICRA had upgraded its rating outlook for the Company to AAA / Stable. It secured its first low-cost Sustainability Linked Rupee Loan of Rs. 200 Crore. L&T Infrastructure Finance Company Limited (LTIF) and L&T Housing Finance Limited (LTHF), the wholly owned subsidiaries of L&T Finance Holdings Limited, the holding company were merged with the Company w.e.f. April 12, 2021 by the receipt of Orders from NCLT, Mumbai and Kolkata Bench. Consequent to merger of L&T Infrastructure Finance Company Limited with L&T Finance Limited, Company has taken steps to convert the IDF - NBFC business to an NBFC - Investment and Credit Company (NBFC - ICC). Accordingly, L&T Infra Credit Limited (formerly known as L&T Infra Debt Fund Limited) has applied to the Reserve Bank of India (RBI) for conversion to an NBFC - ICC.
During the year 2021-22, the Company redeemed 2,50,00,000 Non-Convertible Redeemable Preference Shares (NCRPS) amounting to Rs. 250 Crore. Further, it redeemed 7,74,10,000 NCRPS amounting to Rs. 774 Crore. It completed existing Real Estate projects which resulting in re-payments / pre-payments of over Rs. 3,000 Crore. It launched the Small and Medium Enterprise Loans (SME loans).
During the year 2022-23, 100% of the Paid-up Share Capital of L&T Investment Management Limited, a Wholly-Owned Subsidiary of the Company and the Asset Manager of L&T Mutual Fund, was sold to HSBC Asset Management (India) Private Limited on November 25, 2022.
L&T Finance Share Price
L&T Finance share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
L&T Finance Market Cap
Market capitalization of L&T Finance indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how L&T Finance is valued compared to its competitors.
L&T Finance PE Ratio
L&T Finance PE ratio helps investors understand what is the market value of each stock compared to L&T Finance 's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
L&T Finance PEG Ratio
The PEG ratio of L&T Finance evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
L&T Finance ROE (Return on Equity)
Return on Equity (ROE) measures how effectively L&T Finance generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
L&T Finance ROCE (Return on Capital Employed)
Return on Capital Employed (ROCE) evaluates the profitability of L&T Finance in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
L&T Finance Total Debt
Total debt of L&T Finance shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
L&T Finance Debt to Equity Ratio
The Debt-to-Equity (DE) ratio of L&T Finance compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
L&T Finance CAGR (Compound Annual Growth Rate)
CAGR shows the consistent growth rate of L&T Finance over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
L&T Finance Technical Analysis
Technical analysis of L&T Finance helps investors get an insight into when they can enter or exit the stock. Key components of L&T Finance Technical Analysis include:
Support Levels (S1, S2, S3)
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
Resistance Levels (R1, R2, R3)
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where L&T Finance shares often struggle to rise above due to selling pressure.
L&T Finance Dividends
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect L&T Finance ’s financial health and profitability.
L&T Finance Bonus Shares
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
L&T Finance Stock Split
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
L&T Finance Financials
The financials of L&T Finance provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
L&T Finance Profit and Loss Statements
The profit and loss statement of L&T Finance highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of L&T Finance .
L&T Finance Balance Sheet
The balance sheet presents a snapshot of L&T Finance ’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
L&T Finance Cashflow Statements
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.
L&T Finance Net Interest Margin (NIM)
L&T Finance Net Interest Margin (NIM) tells about the profitability earned by all NBFCs and financial institutions. It represents the income generated by the bank from the difference between the interest earned on loans and the interest paid on public deposits. Net Interest Margin (NIM) is a metric that monitors the profitability generated from a bank's lending activities.
L&T Finance Non-Performing Assets (NPA) Ratio
Non-Performing Assets (NPA) indicate the ratio of a bank's loans that are classified as non-performing. A lower NPA ratio reflects stronger asset quality and more effective risk management.
L&T Finance Capital Adequacy Ratio (CAR)
Capital Adequacy Ratio (CAR) is a metric to measure the bank's ability to absorb losses and still remain financially stable. A higher CAR shows that the bank is financially sound and can absorb potential losses.
L&T Finance Gross NPA
Gross NPA is the percentage of total non-performing loans before provisioning, while net NPA is the percentage after provisioning. Lower gross and net NPA ratios indicate better loan quality.
L&T Finance Net NPA Ratio
Net NPA is the actual losses a bank has incurred due to NPA accounts. Lower the NPA, better the banks can maintain stable income from interest on loans.
L&T Finance CASA Ratio
CASA ratio tells how much of a bank's total deposits are in both current and savings accounts.
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