L&T Finance Ltd (LTF) – 2

<< LTF Financial

L&T Finance Limited is currently showing robust financial health with strong performance in recent quarters, positive market momentum, and overall bullish sentiment from analysts, but appears somewhat overvalued based on valuation metrics and the rapid rise in share price.^[1]^[2]^[3]

Financial Condition

Q1 FY26 Results: Total income was ₹4,259.60 crore (up 15.8% QoQ and 12.6% YoY), net profit at ₹700.84 crore, and EPS at ₹2.80 (up 27.3% QoQ and 3.7% YoY), showing solid growth and operational improvement.^[1]
Consistent Returns: 1-year return over 33%, 3-year return above 192%, and 5-year return over 270%, significantly outperforming the broader market.^[4]^[3]
Institutional Interest: Institutional holdings are high at 20.3%, with a 1.54% increase in the last quarter.^[2]
Valuation: PE Ratio is about 20.89, Price-to-Book around 2.3, and ROE at 10.34%. Growth in revenue and operating profit has been comparatively slow (net sales annualized at 3.24%, operating profit at 0.87%).^[2]

Future Outlook & Analyst Recommendations

Momentum: The stock recently hit an all-time high and trades above all major moving averages, indicating strong upward momentum.^[3]
Buy Recommendations: Prominent brokerages like Motilal Oswal maintain a “Buy” with a target price of ₹260, citing strong outlook and sectoral tailwinds.^[5]^[6]^[7]
Growth Drivers: Expansion in retail and rural lending, technological initiatives, and improving asset quality continue to act as growth catalysts.^[3]^[1]
Outlook: Continued bullishness, but some analysts flag slower fundamental growth versus price appreciation, suggesting need for valuation caution.^[4]^[2]

Overvaluation & Risks

Valuation Metrics: Current valuations (PE and Price/Book) are above historical averages, judged as “expensive” by market analysts despite the strong run-up.^[2]
Volume Trends: Delivery volumes are declining, implying possible reduced investor participation and potential short-term volatility.^[2]
Fundamental Caution: Operating profits and sales have not grown as fast as the share price; market enthusiasm may have run ahead of fundamentals in the short term.^[4]^[2]

Latest News Impacting Outlook

L&T Finance unveiled a major TV ad campaign for its two-wheeler loan product, indicating aggressive retail focus.^[8]
Recent all-time highs and consistent gains reflect continued sector leadership and positive market perception.^[6]^[3]
No major negative news or regulatory headwinds reported as of mid-September 2025.^[6]^[1]

In summary: L&T Finance is financially strong, in a clear market uptrend, and receives “Buy” ratings from leading brokerages, but is currently considered overvalued with slowing growth in core metrics. The medium- to long-term outlook remains positive if management delivers on growth drivers, but new investors should be cautious of entering at elevated valuations.^[9]^[7]^[2]

Key Details

L&T Finance Limited (NSE: LTF) is a leading non-banking financial company (NBFC) in India, part of Larsen & Toubro Group, offering a diverse range of retail, corporate, housing, and infrastructure finance products and services across the country.

Headquarters: Mumbai, India
Promoter: Larsen & Toubro Ltd.
Managing Director/CEO: Sudipta Roy

Business Segments

Housing Finance: Home loans, real estate finance, and loans against property.
Personal Loans: For varied customer financial needs.
Two-Wheeler Finance: Loans for buying new/used two-wheelers.
Farm Equipment Finance: Tractors and agricultural equipment loans.
SME Loans: For small and medium-sized businesses.
Micro Loans: For low-income individuals and enterprises.
Wholesale Finance: Infrastructure, structured corporate, and supply chain finance.

Recent Highlights

L&T Finance has integrated technology-driven initiatives like Project Cyclops for AI/ML-based credit underwriting to enhance operational efficiency and customer acquisition.
Recent quarters show mixed signals: strong performance in segments like two-wheeler and farmer finance, but slower growth in personal loans.
The company maintains a robust capital position, diversified loan book, and high credit ratings.

Corporate Structure

L&T Finance became L&T Finance Limited after a rebranding in 2023 (from “L&T Finance Holdings”).
Major subsidiaries include L&T Infra Investment Partners Advisory, L&T Housing Finance, and L&T Infrastructure Finance Company.

Additional Data

ISIN: INE498L01015
Face Value: ₹10
Number of Employees: ~36,500

L&T Finance Limited is well-recognized in the Indian NBFC sector, focusing on rural, housing, and infrastructure financing, with a strong parentage from Larsen & Toubro, a major Indian conglomerate.