L&T Finance Balancing Growth, Asset Quality Amid Macro Headwinds, Says Motilal Oswal Maintaining 'Buy'

Supported by digital partnerships with major players such as Amazon and PhonePe, L&T Finance is poised for sustainable earnings growth once the near-term headwinds in the MFI business subside..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Motilal Oswal Report.L&T Finance Ltd. has invested in process automation and customer journeys. This, along with large partnerships with digital behemoths, should lead to stronger and more sustainable retail loan growth. While there is industry-wide stress in non-MFI retail segments like unsecured business loans and micro-laon against property, we expect the stress to subside within the next few quarters. Going forward, we expect L&T Finance’s growth in MFI loans to be more opportunistic in nature, given that it targets to bring down the MFI loans in the loan mix to 20-22% over the long term. L&T Finance's relatively better navigation of the MFI credit cycle and diversification into non-leveraged MFI markets demonstrate its resilience and adaptability. Supported by digital partnerships with major players such as Amazon and PhonePe, L&T Finance is poised for sustainable earnings growth once the near-term headwinds in the MFI business subside..L&T Finance can deliver a PAT CAGR of ~25% over FY25-FY27E, which will result in a RoA/RoE of 2.7%/14% in FY27E. Reiterate our Buy rating on the stock with a target price of Rs 260 (based on 2x Mar’27 P/BV). .Key risks: stress in microfinance lingering beyond the next three-four months, asset quality deterioration in relatively vulnerable retail segments such as two-wheeler, unsecured business loans and micro-LAP andany near-term pressure on NIM and fee income..Click on the attachment to read the full report:.Samhi Hotels Gets Yes Securities 'Buy' Initiation, Sees Upto 45% Upside.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

L&T Finance Balancing Growth, Asset Quality Amid Macro Headwinds, Says Motilal Oswal Maintaining 'Buy'

L&T Finance will soon emerge out of the MFI credit cycle and will continue to deliver better profitability and RoA expansion, adds Motilal Oswal

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