L&T Finance Ltd’s fundamental analysis highlights key financial metrics, including a market capitalization of ₹41,932 crore, a PE ratio of 17.0, a debt-to-equity ratio of 3.27, and a return on equity (ROE) of 10.3% These figures indicate the bank’s financial health and its ability to manage debt while delivering returns.
Content:
- L&T Finance Ltd Overview
- L&T Finance Financial Results
- L&T Finance Ltd Financial Analysis
- L&T Finance Limited Company Metrics
- L&T Finance Ltd Stock Performance
- L&T Finance Ltd Peer Comparison
- L&T Finance Limited Shareholding Pattern
- L&T Finance Limited History
- How To Invest In L&T Finance Ltd Share?
- L&T Finance Limited Fundamental Analysis – FAQs
L&T Finance Ltd Overview
L&T Finance Ltd, a subsidiary of Larsen & Toubro, offers a wide range of financial services, including loans, asset management, and microfinance. It focuses on rural finance, housing, and infrastructure, playing a crucial role in India’s financial sector.
The company has a market capitalization of ₹41,932 crore and is listed on both the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). Currently, the stock is trading 13.4% below its 52-week high and 39% above its 52-week low.
L&T Finance Financial Results
L&T Finance Limited showed strong financial performance in FY24 with sales of ₹13,581 crore and a net profit of ₹2,317 crore, reflecting a 51% increase from FY22. The Operating Profit Margin remained stable at 59%, while the EBITDA grew to ₹8,521 crore, despite high-interest expenses of ₹5,377 crore.
- Revenue Trend: Sales grew consistently, reaching ₹13,581 crore in FY24, up from ₹12,775 crore in FY23 and ₹11,930 crore in FY22, showing a steady expansion in revenue across these years.
- Equity and Liabilities: Equity capital stood at ₹2,489 Crores in FY24, with reserves increasing to ₹20,706 Crores. Total liabilities increased to ₹1,02,351 Crores from ₹1,06,027 Crores in FY23, indicating a growing financial base
- Profitability: Operating profit increased from ₹6,685 crore in FY22 to ₹8,046 crore in FY24, with FY23 at ₹7,512 crore. The OPM% also improved from 56% in FY22 to 59% in FY24, reflecting higher efficiency.
- Earnings Per Share (EPS): EPS nearly doubled, from ₹4.33 in FY22 to ₹9.34 in FY24, with FY23 at ₹6.56, driven by the substantial growth in net profit across these years, enhancing shareholder returns.
- Return on Net Worth (RoNW): L&T Finance Limited’s Return on Net Worth (RoNW) of 10.3% in FY24 slightly improves from 10% in FY22.
- Financial Position: EBITDA strengthened from ₹7,079 crore in FY22 to ₹8,521 crore in FY24, with FY23 at ₹8,039 crore. Despite high-interest costs, L&T Finance maintained a solid financial position throughout these years.
L&T Finance Ltd Financial Analysis
| FY24 | FY23 | FY22 | |
| Sales | 13,581 | 12,775 | 11,930 |
| Expenses | 5,534 | 5,263 | 5,244 |
| Operating Profit | 8,046 | 7,512 | 6,685 |
| OPM % | 59 | 59 | 56 |
| Other Income | 474.54 | -2,160 | 393.85 |
| EBITDA | 8,521 | 8,039 | 7,079 |
| Interest | 5,377 | 5,797 | 5,754 |
| Depreciation | 114.77 | 111.24 | 102.64 |
| Profit Before Tax | 3,029 | -556.52 | 1,223 |
| Tax % | 23.5 | -30.97 | 30.55 |
| Net Profit | 2,317 | 1,536 | 1,049 |
| EPS | 9.34 | 6.56 | 4.33 |
| Dividend Payout % | 26.77 | 30.49 | 11.55 |
All values in ₹ Crores.
L&T Finance Limited Company Metrics
L&T Finance has a market cap of ₹41,932 crore, with a current price of ₹168 and an EPS of ₹9.95. The stock shows strong returns, with a 36% increase over 1 year and a 59.1% OPM.
- Market Cap: L&T Finance’s market capitalization is ₹41,932 crore, indicating its significant market presence and substantial company valuation, reflecting investor confidence and robust financial performance.
- Book Value: The book value per share is ₹94.2, representing the company’s net asset value.
- Face Value: The face value of each share is ₹10.0, used to calculate dividends and assess stock value relative to its market price, providing a base measure for shareholder equity.
- Turnover: L&T Finance’s turnover, or revenue, stands at ₹13,581 crore, demonstrating strong growth from previous years and indicating effective business operations and market expansion.
- PE Ratio: The price-to-earnings (PE) ratio is 17.0, suggesting that the stock is trading at 17 times its earnings, reflecting investor expectations and perceived growth potential.
- Debt: The company’s debt totals ₹76,603 crore, with a debt-to-equity ratio of 3.27, indicating high leverage and the need for careful debt management to maintain financial stability.
- ROE: Return on Equity (ROE) is 10.3%, highlighting the company’s effective use of shareholder equity to generate profit, demonstrating its efficiency in delivering returns to investors.
- EBITDA Margin: The EBITDA margin is 59.1%, showcasing strong operational efficiency and profitability.
- Dividend Yield: The dividend yield is 1.49%, reflecting the company’s commitment to returning value to shareholders through dividends.
L&T Finance Ltd Stock Performance
Over 5 years, the return on investment (ROI) was 15%, increasing to 29% over 3 years, and 36% over 1 year, showing strong growth in returns over shorter periods.
| Period | Return on Investment (%) |
| 5 Years: | 15% |
| 3 Years: | 29% |
| 1 Year: | 36% |
Examples:
A ₹1 lakh investment over 5 years yielded ₹15,000 return resulting in a total amount of ₹1,15,000.
A ₹1 lakh investment over 3 years provided ₹29,000 return resulting in a total amount of ₹1,29,000.
A ₹1 lakh investment over 1 year generated ₹36,000 return resulting in a total amount of ₹1,36,000.
L&T Finance Ltd Peer Comparison
L&T Finance Ltd, with a market cap of ₹41,932 crore, competes against major players like Bajaj Finance, Bajaj Finserv, Shriram Finance, Cholamandalam Investment & Finance, Bajaj Holdings, and HDFC AMC, each showcasing varied performance metrics and market presence.
| S.No. | Name | CMP Rs. | Mar Cap Rs.Cr. | PEG | 3mth return % | 1Yr return % |
| 1 | Bajaj Finance | 6735.35 | 416875.38 | 0.95 | -1.34 | -4.73 |
| 2 | Bajaj Finserv | 1619.25 | 258507.23 | 1.52 | 0.78 | 10.43 |
| 3 | Shriram Finance | 3150 | 118491.54 | 0.67 | 31.6 | 71.22 |
| 4 | Cholaman.Inv.&Fn | 1399.55 | 117523.68 | 1.37 | 9.47 | 31.82 |
| 5 | Bajaj Holdings | 9770.5 | 108749.25 | 0.77 | 19.37 | 37.81 |
| 6 | HDFC AMC | 4389.45 | 93691.44 | 2.85 | 14.7 | 75.59 |
| 7 | L&T Finance Ltd | 168.21 | 41932.09 | 22.32 | 5.69 | 35.98 |
L&T Finance Limited Shareholding Pattern
As of June 2024, the shareholding pattern of L&T Finance Limited shows promoters holding 66.37%, Foreign Institutional Investors (FII) at 7.34%, Domestic Institutional Investors (DII) at 11.64%, and retail and others at 14.66%.
| Jun 2024 | Mar 2024 | Dec 2023 | |
| Promoters | 66.37 | 65.86 | 65.9 |
| FII | 7.34 | 11.04 | 10.67 |
| DII | 11.64 | 8.69 | 9.07 |
| Retail & others | 14.66 | 14.39 | 14.36 |
All values in %
L&T Finance Limited History
L&T Finance Limited was incorporated in 1994, initially focusing on offering lease and hire purchase solutions for small and medium enterprises (SMEs). This marked the beginning of its financial services journey.
In 2004, L&T Finance expanded its operations by entering the rural financing market, providing loans for tractors and farm equipment. This diversification laid the groundwork for further growth in rural financial services.
By 2008, the company made significant strides, venturing into microfinance and the distribution of financial products. This period also saw the commencement of financing for capital market products, broadening its portfolio.
A major milestone occurred in 2010 when L&T Finance acquired DBS Cholamandalam Asset Management and Trustees Limited, entering the mutual funds business. This acquisition marked its strategic expansion into asset management.
In 2017, L&T Finance Holdings received accolades, including the Golden Peacock Award for Risk Management, highlighting its commitment to excellence. The company also launched micro-loans in Bihar and Assam, enhancing its rural outreach.
How To Invest In L&T Finance Ltd Share?
Investing in L&T Finance shares is a straightforward process:
- Open a Demat Account: Start by opening a Demat and trading account with a reliable brokerage firm like Alice Blue.
- Complete KYC: Submit necessary documents for KYC verification.
- Fund Your Account: Deposit funds into your trading account.
- Buy Shares: Search for L&T Finance shares and place your buy order.
L&T Finance Limited Fundamental Analysis – FAQs
L&T Finance Ltd’s fundamental analysis reveals a market capitalization of ₹41,932 crores, a PE ratio of 17.0, a debt-to-equity ratio of 3.27, and a return on equity (ROE) of 10.3%, reflecting its financial stability and debt management efficiency.
The market capitalization of L&T Finance Ltd is ₹41,932 crore. This figure represents the total value of the company’s outstanding shares in the stock market, calculated by multiplying the current share price by the total number of shares outstanding.
L&T Finance Limited is a subsidiary of Larsen & Toubro, providing diverse financial services, including loans, asset management, and microfinance. It focuses on sectors like rural finance, housing, and infrastructure, contributing significantly to India’s financial ecosystem.
L&T Finance Ltd is primarily owned by Larsen & Toubro (L&T), one of India’s leading engineering and construction conglomerates. L&T promotes and controls L&T Finance Ltd as its financial services arm, overseeing its diverse financial operations.
The main shareholders of L&T Finance Ltd include its parent company, Larsen & Toubro (L&T), along with institutional investors like mutual funds, foreign portfolio investors, and insurance companies, who hold significant stakes in the company’s equity.
L&T Finance operates in the financial services industry, offering a wide range of services such as loans, asset management, and microfinance. It focuses on sectors including rural finance, housing, and infrastructure, contributing to India’s economic development.
To invest in L&T Finance Ltd shares, open a trading account with a registered stockbroker, fund the account, and search for L&T Finance Ltd’s stock symbol on the exchange. Place a buy order through your broker’s platform to purchase shares.
Determining if L&T Finance is overvalued or undervalued requires analyzing its current market price compared to its intrinsic value, considering factors like PE ratio, growth prospects, and industry comparisons. With a PE ratio of 17.0, L&T Finance might be fairly valued, reflecting market expectations and moderate growth potential.
Disclaimer: The above article is written for educational purposes, and the companies’ data mentioned in the article may change with respect to time The securities quoted are exemplary and are not recommendatory.
