ICICI Securities: L&T Finance Q1 Trends Point Towards Guarded Optimism
L&T Finance said the CRPS will carry dividend of 7.95 per ent per annum payable annually. The tenure of the securities is three years and six months. (Photographer: Dhiraj Singh/Bloomberg)

ICICI Securities: L&T Finance Q1 Trends Point Towards Guarded Optimism

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

L&T Finance Holdings reported its Q1 FY21 Profit After Tax at Rs 1.47 billion (I-Sec: Rs 3.8 billion) primarily led by accelerated Covid-19 and macro prudential buffer of Rs 5.8bn, and provisioning on one conglomerate in the defocused business of Rs 2.25bn utilising exceptional gain from sale of the wealth management business. With this, LTFH now carries a buffer of 3% on rural portfolio and 2.3% on Loan Against Property and Refinancing (LAP+RE). Given the prevailing macro uncertainty, prudent provisioning will continue for a couple of quarters more (we are building-in credit costs of 3.3% for FY21E).

Emerging trends in rural both on demand and collections has brought in some guarded optimism, though we will watch the behaviour of its real estate financing and infrastructure business till clear visibility emerges. Rising credit reserves, adequate liquidity and stock underperformance (approximately 47% in past six months) renders risk-reward favourable at 0.7 times estimated for FY22 Price to Book Value.

Click on the attachment to read the full report:

ICICI Securities L&T Finance Q1FY21 Results.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint 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 brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.