L&T Finance Shares Fall Despite Strong Q4 Results As Tamil Nadu Bill Raises Concerns
Investor sentiment was hit after Tamil Nadu introduced a bill aimed at preventing coercive recovery actions by lenders.
Shares of L&T Finance Ltd. fell in midday trade on Monday, despite the company reporting a 14% increase in net profit, amid fresh concerns triggered by Morgan Stanley's latest note on financials.
Investor sentiment was hit after Tamil Nadu introduced a bill aimed at preventing coercive recovery actions by lenders. Microfinance collections have historically been highly sensitive to such regulatory announcements, said the note. L&T Finance is among the most exposed lenders to the Tamil Nadu market. Other players such as Equitas Small Finance Bank, Muthoot Microfin, and CreditAccess Grameen also have over 20% exposure to the state.
About 13% of the microfinance industry's assets under management are concentrated in Tamil Nadu, making it the second-largest MFI state in India.
A similar ordinance passed in Karnataka in February 2025 had previously resulted in an adverse impact on growth and collections, raising further concerns for lenders now operating in Tamil Nadu.
On Friday, L&T Finance had reported a nearly 16% growth in standalone net profit for the fourth quarter of financial year 2025. Net profit rose to Rs 630.59 crore compared to Rs 544.88 crore in the year-ago period, according to a stock filing. Total income increased 9.5% to Rs 4,024.43 crore from Rs 3,675.69 crore.
On a consolidated basis, profit surged 15% to Rs 636.17 crore, while total income rose 9.6% to Rs 4,027.22 crore.
The board also recommended a final dividend of Rs 2.75 per equity share for fiscal 2025, subject to shareholder approval at the upcoming annual general meeting.
L&T Finance Share Price Today
The scrip fell as much as 8.55% to Rs 158.20 apiece, the lowest level since April 16. It pared losses to trade 4.21% lower at Rs 165.71 apiece, as of 01:18 p.m. This compares to a 1.23% advance in the NSE Nifty 50 Index.
It has fallen 1.83% on a year-to-date basis, but has risen 16.29% in the last 12 months. Total traded volume so far in the day stood at 4.6 times its 30-day average. The relative strength index was at 57.16 .
Out of 19 analysts tracking the company, 15 maintain a 'buy' rating, and four suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 3.4%.
