- UBS upgraded L&T Finance stock to Buy from Neutral with a higher target price of Rs 380
- Shares of L&T Finance rose up to 2.56% intraday to Rs 312.70 after the UBS upgrade
- UBS expects strong personal-loan growth to drive the next unsecured credit cycle in India
L&T Finance shares are in focus on Wednesday's trading session after UBS upgraded the stock to Buy from Neutral and raised its target price to Rs 380 from Rs 350.
Shares of the NBFC rose as much as 2.56% intraday to Rs 312.70.
The brokerage upgrade comes as UBS expects a stronger recovery in personal-loan growth, which it sees as the key driver of the next unsecured credit cycle in India.
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UBS believes India is entering a strong unsecured credit growth cycle led by personal loans, supported by healthy asset quality, flat unsecured household leverage, abundant system liquidity and a more risk-on stance among lenders.
For L&T Finance specifically, the brokerage expects faster personal-loan growth and return on assets (ROA) to improve towards around 3%. UBS has also raised its FY28 earnings estimates, with EPS now seen at Rs 21 versus Rs 20.20 earlier.
UBS continues to favour L&T Finance alongside Poonawalla Fincorp, Cholamandalam Investment and Finance and Shriram Finance as it expects the unsecured lending cycle to revive.
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