Cautiously Optimistic On L&T Finance, Says Prabhudas Lilladher
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Prabhudas Lilladher Report
We are positive on Larsen and Toubro Finance Holdings Ltd. in anticipation of lower non-performing asset stress on three counts:
Increased provisioning buffers (1.9% standard asset provisioning, expected credit loss at 64%, 10% provisions on Q3 restructured book of Rs 2 billion)
Write-offs limited to only one conglomerate account
Maximum potential restructured book at 1.4%.
Given incremental provisioning and restructuring stand capped coupled with additional buffers, we lower our NPA forecasts to 6% as against 6.5-6.7% earlier over FY21-23E.
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