Q3 Results Review and Expectation on L&T Finance Ltd

L&T Finance Ltd. is a NBFC, offering a range of financial products and services. Company has filed requisite application for necessary registration as Systemically Important Non- Deposit Accepting Core Investment Company (NBFC-CIC) • LTF’s Q3FY25 performance was marked by stress in microloans. • There were early signs of weakness in 2W and pressure on NIM+fees due to a slowdown in high-yielding businesses. • We revise down estimates to factor in the above; valuations remain comfortable. Q3FY25 Earnings Update: Positives: • NII was up 11% yoy due to a 17% overall loan growth. • We expect LTF to deliver 20-21% growth in retail loans in FY2025-27E. • LTF’s management remains assertive on managing stress in microloans. Negatives: • Reported NIM+fees were down 60 bps yoy and qoq—this reflected compression in yield and lower fees. • Gross stage-3 loans were up 19% yoy to 2.85%. • Collection efficiency drops in microloans. This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report and before taking any investment decision we request you to refer the detailed report including disclaimers by clicking here: ***** Further, the recipient of this material should take their own professional advice before investing. Holding Period: 12 Months / Disclaimer: ***** Result Update Current Market Price (CMP) Rs. 146 Target Price Rs. 155 L&T Finance (LTF) - ADD Click here To read the detailed report (NII- Net Interest Income, AUM- Asset Under Management, NIM – Net Interest Margin)