L&T Finance Falls Despite Record 32% Profit Growth

L&T Finance shares closed 3.11% lower at Rs 253.85 on Friday, after falling as much as 6% intraday, even as the lender reported a record September quarter profit up about 32%, a reminder that strong numbers do not always protect a stock. Consolidated net profit rose 32.4% to Rs 973 crore from Rs 735 crore a year earlier. The total loan book grew 28% to Rs 1.36 lakh crore, with the retail book up 29% to about Rs 1.35 lakh crore, ahead of the company’s 20% growth target. Retail disbursements rose 27% to about Rs 24,000 crore, and net interest income grew 32.6% to Rs 3,187 crore. Asset quality improved, with gross stage 3 assets at about 2.7%, down from 2.86% in June, and credit cost easing to 2.46% from 2.54%. Return on assets rose to 2.60% from 2.41%. A stock falling after a strong print usually means expectations ran ahead of the numbers, or investors are focused on something beyond profit, such as margins, credit costs or valuation. No single cause has been confirmed, and shares recovered part of the early fall. For a retail-focused lender, the key tests are whether growth near 28% can be sustained and whether credit costs, still above 2%, keep falling. The stock has ranged between Rs 234.90 and Rs 338.60 over the past 52 weeks, with a market cap of around Rs 63,625 crore, closer to its low than its high. After Friday’s fall, the focus shifts to whether growth and asset quality justify a stronger rerating. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in L&T Finance. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.