Target: ₹116

CMP: ₹95.15

L&T Finance Holdings (LTFH) has reported Q3-FY23 PAT of about ₹450 crore, around 3 per cent above our estimates, primarily driven by higher than expected interest income due to change in the asset mix towards retail products. In the seasonally-strong festive quarter, disbursement grew 19.1 per cent QoQ/32.8 per cent YoY, led by the highest-ever quarterly disbursement in the 2W and farm-equipment segments as well as sustained healthy disbursements in home loans and LAP.

Overall AUM, however, declined 1.9 per cent QoQ/grew 3.4 per cent YoY, due to accelerated repayments/pre-payments (₹4,220 crore) and sell-downs (₹2,950 crore) in the wholesale finance segment.

Retail disbursements grew 13.4 per cent QoQ/52 per cent YoY, resulting in retail AUM growth of 9.5 per cent QoQ/33.8 per cent YoY to ₹57,000 crore. The retail AUM now accounts for 64 per cent of the overall book (Q3FY22: 50 per cent); Management expects this share to touch about 90 per cent by FY24-end. Wholesale distributions grew 90.8 per cent QoQ (on a low base)/declined 32.8 per cent YoY. However, the aforementioned repayment/prepayment and sell-downs resulted in the wholesale AUM declining 17.5 per cent QoQ/24 per cent YoY to ₹31,000 crore.

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