L&T Finance Holdings
BSE SENSEX
32,383
S&P CNX
10,021
27 July 2017
1QFY18 Results Update | Sector: Financials
CMP: INR161
n
TP: INR200 (+24%)
Buy
Motilal Oswal values your support in
the Asiamoney Brokers Poll 2017 for
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request your ballot.
Strong fee income traction; meaningful asset quality improvement
n
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
LTFH IN
1,817
293 / 4.6
167 / 79
11/43/74
662
35.8
2019E
42.1
42.9
19.3
10.6
60.0
2.3
19.1
14.8
15.2
2.7
0.8
n
Financials & Valuations (INR b)
Y/E March
2017 2018E
NII
31.4
37.6
PPP
26.7
37.0
PAT
9.2
13.3
EPS (INR)
5.2
7.3
BV/Sh. (INR)
44.3
50.9
RoAA (%)
1.5
1.9
RoE (%)
12.4
15.6
Payout (%)
19.8
15.2
Valuation
P/E (x)
30.8
22.0
P/BV (x)
3.6
3.2
Div. Yield (%)
0.6
0.6
n
n
Estimate change
TP change
Rating change
L&T Finance Holding’s (LTFH) 1QFY18 PAT grew 49% YoY to INR3.09b. Robust
core disbursement growth of 95% YoY, strong fee income across all lending
segments, sharp reduction in the GNPL ratio and shoring up of the provision
buffer were key highlights of the quarter.
Rural business:
2W/tractor disbursements increased 82%/169% YoY. While
such strong growth in the tractors segments was expected (LTFH has been
gaining market share from the lows of 4% in FY16 to 11% now), growth in the
2W financing segment was a positive surprise. With PPoP margins improving
180bp YoY to 10.72%, management chose to incur higher provisions and
maintain RoE at 21-22% levels.
Housing business:
Growth in the retail home loan/LAP segment remains
sluggish, but was compensated by 4x disbursements in the builder loans
segment. Consequently, strong fee income helped improve RoA/RoE to
3.2%/30% in 1QFY18. However, we expect RoE to normalize to 18-19% by
FY19.
Wholesale business:
LTFH has also started last mile financing for road projects
in the past few quarters. This, coupled with a large number of operational
projects coming up for refinance, drove 4.5x disbursement growth in the
quarter. While margins are under pressure, fee income traction is strong. RoE
remained largely stable YoY at 10%.
Valuation view:
LTFH has scripted an impressive turnaround over the past five
quarters, with a renewed focus on profitable segments. It has delivered strong
growth and consistent improvement in profitability. We are also encouraged by
the strong fee income traction witnessed this quarter – we believe this will play
a key role in achieving 18%+ RoE by FY19/20. We marginally reduce our FY18E
EPS to factor in higher provisions, but increase our FY19/20 estimates by 5-7%.
Buy
with a TP of INR200 (3.3x FY19E BVPS).
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Piran Engineer
(Piran.Engineer@motilaloswal.com); +91 22 6129 1539
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526;
Anirvan Sarkar
(Anirvan.Sarkar@MotilalOswal.com);

L&T Finance Holdings
22% RoE despite increased
provisioning
Rural Business
n
n
n
n
Disbursement grew 65% YoY, with 169%/82% YoY growth in tractor/2W
financing. LTFH is now the second largest tractor financier in India and has
steadily increased its market share from 4% to 11% over the past 4-6 quarters.
Fee income increased almost 3x YoY to INR360m.
The GNPL ratio declined 85bp QoQ (both at 90dpd basis) to 11.35%.
Management chose to utilize its strong PPoP margin of 10.7% to shore up
provisions in this segment. As a result, NNPL ratio declined more than 200bp
(90dpd basis) to 7.6%.
Despite the increased provisioning, PAT grew 13% YoY to INR760m. This
segment continues to make 21-22% RoE.
Growth driven primarily by
the real estate finance
business
Housing Business
n
n
n
While disbursement growth in the retail home loan segment remains sluggish at
9% YoY, disbursements were up 4x in the builder loans segment.
Due to this, fee income increased more than 4x YoY to INR440m.
PAT grew 180% YoY to INR1.09b resulting in RoA/RoE of 3.2%/30% in the
quarter.
Fee income increased 3.5x
YoY to INR1.29b driven by
increased sell-downs (up
3.3x YoY to INR26b)
Wholesale Business
n
n
n
n
In the infrastructure finance segment, there was strong traction in the operating
roads financing business. Disbursements were up 4.5x YoY in this business.
The company disbursed IPO Finance of INR80b in the quarter. However, this is a
one-off. Management commented that this is a low-risk, low-return and low-
tenure business.
Fee income increased 3.5x YoY to INR1.29b driven by increased sell-downs (up
3.3x YoY to INR26b).
The GNPL ratio (90dpd) declined more than 200bp QoQ to 4.3%. Part of this
decline is attributable to sale of NPLs to ARCs. Interestingly, the company
maintained its PCR at 48% despite migration from 120dpd to 90dpd in the
quarter.
Other Business
n
n
PAT in the Investment Management business grew 163% YoY to INR190mn. This
was driven by robust Avg. AUM growth of 57% YoY to INR446b.
The Wealth Management business recorded PAT of INR30m in the quarter v/s a
loss of INR20m in 1QFY17. AAUS increased 71% YoY to INR166b.
Valuation and view
n
n
L&T Finance Holdings (LTFH) is a quintessential turnaround story, in our view.
From a company with 20+ product lines and sub-standard return ratios, it is
gradually transforming itself to a focused financier with eight product lines
across three verticals, with a target to achieve 18-20% RoE by FY20 (12% in
FY17).
With focused management and strong execution skills, the company is set to
deliver 14-15% loan CAGR over FY17-20, driven by growth in the rural and
housing finance segments. In addition, continued origination and down-selling in
the infra finance book will drive fee income traction and thus RoE elevated.
2
27 July 2017

L&T Finance Holdings
n
n
Strong growth, pick-up in core fee income and a decline in the expense
ratio/credit costs should elevate RoA/RoE from 1.5%/12.4% in FY17 to
2.5%/19.8% in FY20. While the stock has re-rated well over the past year on
account of strong execution by management, we expect re-rating to continue.
We marginally reduce our FY18 EPS estimates to factor in higher provisions, but
increase our FY19/20 estimates by 5-7%. We use RI model with Rf of 7%, CoE of
13% and terminal growth rate of 5% to arrive at a TP of INR200 (3.3x FY19E
BVPS).
BUY.
Conference call highlights
Business Updates
n
LTFH regained no 2 position in tractor financing, with 11% market share. No. 1
player in 9 out of 17 geographies it operates in.
n
Management is comfortable with the perceived risks in renewable energy
portfolio.
n
Renewables book – 83% operational projects in wind energy and 73%
operational in solar.
n
The company sold down only 1 loan from real estate and 1 from structured
finance in the quarter. All the rest are from the infra book.
n
Funded 17,000 tractors in the quarter.
n
2/3rd of fees come from underwriting and sell-down fees.
n
In the last one year, LTFH has also started doing last mile financing for road
projects.
Asset Quality
n
Total number of defaulters in MFI has remained stable QoQ. The company has
taken provisions of INR0.63b in 4Q and INR0.95b in 1QFY18 against it. The
company will look at individual lending in MFI too
Others
n
The consultation exercise with Oliver Wyman (on risk management) is over and
implementation is underway.
n
While tariffs in solar have dropped drastically, the overall share of solar in the
power sector is small; so even if an SEB is buying renewable power at erstwhile
high rates, it won’t impact overall financials of the SEB much.
n
Disbursements in 2W and tractors also include trade advance to dealers.
n
Growth in solar power projects in India is exponential. Every year, the installed
base has been growing at almost 100%. Management expects such traction to
continue.
27 July 2017
3

L&T Finance Holdings
Exhibit 1: Quarterly Snapshot
FY16
1Q
Profit and Loss (INR m)
Net Interest Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
Share of profit of associates
PAT
Asset Quality
Gross NPAs (%)
Net NPAs (%)
PCR (Calculated, %)
Ratios (%)
Cost to Income
Provision to operating profit
Tax Rate
RoA - calculated
RoE - calculated
Margins Reported (%)
Yield on earning assets
Cost of Funds
Spreads
NIMs
Business Details (INR b)
Total Loans
Total Borrowings
AUM Break-up (INR b)
Rural
Micro Finance
2W
Farm Equipment
Housing
Home loans & LAP
Real Estate Finance
Wholesale
Infra Finance
Structured Finance
Supply Chain Finance
De-focused loan book
Total
Total Borrowing Mix (%)
Term Loan
NCD
LOC/CC/WCL/STL
CP
Others
7,331
3,108
1,148
1,961
4,631
1,878
2,752
831
4
1,925
5.5
4.4
20.0
40.2
40.6
30.2
1.6
2Q
7,957
3,392
1,312
2,081
5,007
1,834
3,173
1,029
11
2,154
5.1
4.1
20.6
40.4
36.6
32.4
1.7
3Q
8,052
3,200
1,348
1,852
5,294
2,035
3,259
1,147
7
2,120
5.0
3.9
21.7
37.7
38.4
35.2
1.6
4Q
8,306
3,428
1,070
2,359
5,405
2,063
3,343
983
9
2,369
3.1
2.1
32.8
41.3
38.2
29.4
1.7
1Q
8,408
3,222
1,095
2,127
5,529
2,530
2,999
951
26
2,074
4.6
3.1
31.7
36.8
45.8
31.7
1.4
2Q
9,343
3,327
1,277
2,050
6,557
3,202
3,354
888
15
2,481
4.7
3.1
34.7
33.7
48.8
26.5
1.7
FY17
3Q
9,338
3,154
1,226
1,928
6,864
3,282
3,582
811
-63
2,709
4.9
3.1
36.1
31.5
47.8
22.6
1.8
4Q
10,046
3,063
1,338
1,725
7,738
6,885
853
-2,286
19
3,158
4.9
3.8
22.7
30.5
89.0
-267.9
2.0
FY18
1Q
10,261
3,277
1,104
2,173
8,055
4,587
3,468
378
2
3,092
5.7
3.3
42.0
28.9
56.9
10.9
1.8
Variation (%)
QoQ
YoY
2
7
-17
26
4
-33
306
-117
-91
-2
22
2
1
2
46
81
16
-60
-94
49
14.2
8.8
5.5
6.1
492
461
75
12
15
48
68
41
26
290
222
50
18
60
492
24.0
38.0
15.0
13.0
10.0
14.3
8.5
5.7
6.3
514
474
79
15
16
48
75
48
27
305
240
45
20
55
514
21.0
39.0
19.0
11.0
10.0
13.5
8.3
5.3
6.0
561
509
82
17
17
48
87
55
32
341
272
49
20
52
561
22.0
35.0
17.0
14.0
11.0
13.7
8.7
5.0
5.8
583
528
86
22
18
46
98
63
35
349
276
50
23
49
583
32.0
28.0
19.0
11.0
10.0
13.7
8.6
5.1
5.8
582
541
86
24
18
44
104
66
38
348
280
47
21
44
582
20.0
34.0
23.0
15.0
9.0
14.0
8.5
5.6
6.3
609
550
92
31
18
43
114
72
42
365
294
48
22
38
609
13.0
34.0
26.0
14.0
13.0
13.6
8.3
5.3
6.1
620
564
96
32
20
43
116
74
41
377
305
50
22
32
620
13.0
34.0
27.0
13.0
13.0
13.5
7.9
5.6
6.2
666
610
100
36
21
44
125
76
49
414
329
64
21
27
667
15.0
33.0
22.0
18.0
11.0
13.4
8.0
5.4
6.1
682
620
105
38
22
45
136
77
59
417
343
57
18
24
682
14.0
37.0
25.0
13.0
11.0
Source: Company, MOSL
2
2
5
7
4
2
8
0
21
1
4
-12
-14
-11
2
17
15
22
57
25
2
30
16
56
20
22
21
-14
-46
17
27 July 2017
4

L&T Finance Holdings
Exhibit 2: We increase our estimates marginally to factor in growth
INR b
NII
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
Loan book
NIM (%)
Spreads (%)
ROAA (%)
RoAE (%)
FY18
36.5
13.9
50.4
14.3
36.2
15.6
20.5
5.7
14.8
740
4.9
5.1
1.9
17.3
Old Est.
FY19
41.0
14.9
55.9
14.8
41.1
13.9
27.1
8.0
19.2
840
4.8
5.3
2.1
19.1
FY20
46.2
17.6
63.8
16.3
47.5
14.7
32.7
9.1
23.7
960
4.7
5.5
2.3
20.1
FY18
37.6
14.2
51.7
14.7
37.0
20.4
16.7
2.2
14.5
708
5.2
4.8
1.9
17.0
New Est.
FY19
42.1
16.2
58.3
15.4
42.9
18.0
24.9
4.4
20.5
803
5.1
4.9
2.3
20.3
FY20
47.9
19.1
67.1
17.0
50.0
19.1
30.9
6.1
24.8
933
5.1
5.0
2.5
20.8
FY18
2.8
2.0
2.6
3.2
2.4
-18.8
-2.0
-4.3
Change %
FY19
FY20
2.6
3.7
9.0
9.0
4.3
5.2
3.8
4.5
4.5
5.4
-8.5
6.7
-4.5
-5.6
4.8
-2.8
Source: MOSL, Company
27 July 2017
5

L&T Finance Holdings
Story in charts
Exhibit 3: Focused loan book grew by 22% YoY
Loan Book (INR b)
17
Loan Growth (%)
17
16
80
18
433
459
509
533
538
571
588
640
658
65
87
127
102
77
28
111
(4)
122
183
231
22
Exhibit 4: Disbursement growth due to IPO Financing
Disbursements (INRb)
Growth (%)
200
15
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5: Cost to income ratio improving
Exhibit 6: Trend in asset quality (1QFY18 data at 90dpd)
GNPA (%)
NNPA (%)
5.7
5.5
5.1 5.0
4.9
4.6 4.7 4.9
4.4
4.1 3.9
3.8
3.3
3.1 3.1 3.1
3.1
2.1
40.2
40.4
37.7
38.8
36.8
33.7
31.5
28.4
28.9
Source: Company, MOSL
Source: Company, MOSL
Exhibit 7: NII grew 22% YoY driven by stable spreads
27
19
NII (INR m)
19
18
NII Growth (%)
21
16
22
Exhibit 8: PAT growth of 49% YoY
PAT (INR b)
PAT Growth (%)
28
33
49
15
17
19
17
15
8
15
7.3
8.0
8.1
8.3
8.4
9.3
9.3
10.0
10.3
-33
1.9
2.2
2.1
2.4
2.1
2.5
2.7
3.2
3.1
Source: Company, MOSL
Source: Company, MOSL
27 July 2017
6

L&T Finance Holdings
Exhibit 9: Financials: Valuation metrics
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
IDFC Bk
FB
DCBB
JKBK
SIB
Equitas
RBL
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
OBC
INBK
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
GRHF
REPCO
DEWH
Housing Finance
RECL
POWF
Infra Finance
SHTF
MMFS
BAF
CIFC
SCUF
LTFH
MUTH
SKSM
FY19E
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Under
Review
Buy
Buy
Neutral
Buy
Neutral
Neutral
Neutral
Buy
CMP
Mcap
EPS (INR)
P/E (x)
BV (INR)
P/BV (x)
RoA (%)
RoE (%)
(INR) (USDb) FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E FY18E FY19E
307
31.0
15.6 17.9 14.0 11.4 146.6 159.2 1.49 1.28 1.23 1.23
9.4
10.1
1,788 69.9
68.2 82.1 26.2 21.8
388
451
4.61 3.96 1.84 1.84 18.8 19.6
525
19.8
21.8 38.1 24.0 13.8
243
274
2.16 1.91 0.81 1.19
9.3
14.7
999
28.2
32.4 41.0 30.8 24.3
232
272
4.30 3.67 1.84 1.99 15.0 16.3
1,787 12.2
92.3 114.5 19.4 15.6
542
633
3.30 2.82 1.78 1.80 18.3 19.5
1,607 14.7
61.9 76.8 26.0 20.9
383
446
4.20 3.60 1.90 1.95 17.3 18.5
59
3.2
3.5
4.2
16.9 14.2
46
49
1.29 1.21 0.93 0.91
7.9
8.8
113
3.1
5.4
6.8
21.0 16.5
62
68
1.81 1.67 0.82 0.86 10.0 10.5
197
0.9
8.4
10.4 23.5 18.9
83
93
2.36 2.12 0.95 0.96 11.4 11.8
86
0.7
3.8
8.2
22.4 10.4
112
118
0.77 0.73 0.23 0.44
3.5
7.2
31
0.6
2.9
3.7
10.7
8.3
28
30
1.11 1.01 0.65 0.74 10.8 12.7
166
0.9
4.8
7.4
34.3 22.3
70
77
2.35 2.15 1.66 2.16
7.1
10.1
534
298
154
155
161
354
155
147
310
3.1
39.8
5.3
2.6
5.9
3.0
1.7
0.8
2.4
18.0
17.9
10.3
13.7
18.4
30.1
24.6
17.1
34.4
23.7
23.3
14.5
22.0
22.5
47.0
34.5
21.4
38.3
29.7
14.9
15.0
11.3
8.7
11.8
6.3
8.6
9.0
22.6
11.3
10.6
7.0
7.2
7.5
4.5
6.9
8.1
160
230
187
233
162
498
315
382
327
180
249
199
255
179
540
345
404
357
3.33
1.16
0.82
0.67
0.99
0.71
0.49
0.38
0.95
2.97
1.06
0.77
0.61
0.90
0.66
0.45
0.36
0.87
1.34
0.44
0.29
0.22
0.59
0.29
0.37
0.22
0.73
1.35
0.50
0.37
0.33
0.66
0.41
0.47
0.26
0.72
13.6
8.7
5.6
6.1
11.9
6.2
8.1
4.6
10.9
13.9
10.0
7.5
9.0
13.2
9.1
10.5
5.4
11.2
Buy
Neutral
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
1,729
738
1,161
478
771
451
174
122
981
400
1,682
1,175
2,250
161
466
820
40.1
5.8
7.8
2.6
0.8
2.2
5.4
5.1
3.5
3.5
14.4
2.8
2.3
4.6
3.0
1.7
41.4
47.9
86.3
9.9
35.8
37.7
35.0
27.2
47.0
53.8
108.4
12.1
42.5
47.1
40.4
30.2
24.1
15.4
13.5
48.1
21.5
12.0
5.0
4.5
12.5
28.8
35.3
21.4
16.9
22.5
11.4
25.8
18.9
13.7
10.7
39.6
18.1
9.6
4.3
4.0
10.0
22.5
26.7
17.7
13.1
16.8
10.7
11.9
228
252
324
33
214
282
196
169
564
120
216
322
874
51
189
219
287
295
368
40
253
321
227
191
646
131
270
380
1,019
59
217
272
4.37 3.10
2.93 2.50
3.59 3.15
14.42 11.83
3.60 3.04
1.60 1.41
0.89
0.72
1.74
3.33
7.78
3.65
2.57
3.17
2.46
3.75
0.77
0.64
1.52
3.06
6.23
3.10
2.21
2.73
2.15
3.02
1.86
1.64
3.28
2.43
2.25
1.25
3.10
2.76
2.60
1.73
3.51
2.74
3.63
1.79
4.99
3.44
1.87
1.63
3.24
2.43
2.21
1.33
3.12
2.72
2.91
1.90
3.51
2.78
3.96
2.03
4.61
5.29
19.3
20.6
28.2
33.0
18.1
14.1
19.1
17.0
14.7
12.0
24.3
18.5
16.2
15.3
23.2
16.1
18.4
19.7
31.3
32.8
18.2
15.6
19.1
16.8
16.3
14.2
25.9
18.9
18.1
17.5
21.4
28.0
78.5 98.5
13.9 17.8
47.6 62.9
55.0 66.4
132.8 171.2
7.2
9.6
41.0 43.3
31.8 68.7
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
Source: MOSL, Company
27 July 2017
7

L&T Finance Holdings
Financials and valuations
Income statement
Y/E March
Interest Income
Interest Expended
Net Interest Income
Change (%)
Other Operating Income
Net Income
Change (%)
Operating Expenses
Operating Income
Change (%)
Provisions/write offs
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Preference Dividend
Change (%)
PAT
Change (%)
2013
38,191
23,286
14,905
24.2
1,757
16,662
27.7
6,225
10,437
20.3
2,731
7,706
2,594
34
7,292
60.3
15
7,277
60.0
2014
48,719
30,739
17,980
20.6
3,653
21,633
29.8
9,123
12,510
19.9
4,261
8,249
2,300
28
5,948
-18.4
760
4,965.3
5,189
-28.7
2015
59,025
35,678
23,347
29.9
4,349
27,697
28.0
10,771
16,926
35.3
6,617
10,309
3,014
29
8,734
46.8
1,102
45.0
7,632
47.1
2016
68,174
41,241
26,933
15.4
6,533
33,466
20.8
13,129
20,337
20.2
7,810
12,527
3,990
32
8,537
-2.3
1,671
51.7
6,866
-10.0
2017
77,710
46,270
31,439
16.7
8,013
39,453
17.9
12,765
26,688
31.2
15,899
10,789
364
3
10,425
22.1
1,244
-25.5
9,180
33.7
2018E
87,677
50,114
37,563
19.5
14,182
51,746
31.2
14,723
37,023
38.7
20,359
16,664
2,171
13
14,493
39.0
1,200
-3.6
13,293
44.8
(INR Million)
2019E
2020E
98,826
112,079
56,727
64,166
42,099
47,912
12.1
13.8
16,187
19,146
58,286
67,059
12.6
15.1
15,397
17,048
42,889
50,010
15.8
16.6
18,039
19,093
24,850
30,917
4,390
6,136
18
20
20,460
24,782
41.2
21.1
1,200
1,200
0.0
0.0
19,260
23,582
44.9
22.4
(INR Million)
2019E
2020E
29,691
29,691
18,172
18,172
90,793
110,925
120,484
140,616
774,504
889,397
14.1
14.8
43,502
47,852
938,490 1,077,866
802,638
932,668
13.3
16.2
72,740
80,013
10.0
10.0
6,823
7,164
939,671 1,079,046
Balance sheet
Y/E March
Capital
- of which equity share capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Other liabilities
Total Liabilities
Loans
Change (%)
Investments
Change (%)
Net Fixed Assets
Total Assets
E: MOSL Estimates
2013
24,668
17,168
37,535
62,202
282,474
34.0
21,019
365,696
323,750
30.0
18,427
139.4
5,767
365,696
2014
27,184
17,184
41,072
68,257
358,536
26.9
21,817
448,609
388,936
20.1
27,303
48.2
7,287
448,609
2015
30,837
17,203
46,562
77,399
420,906
17.4
29,117
527,422
460,425
18.4
26,492
-3.0
7,185
527,422
2016
29,668
17,534
53,237
82,905
516,157
22.6
37,221
636,283
564,679
22.6
35,633
34.5
6,962
637,463
2017
29,691
17,534
60,202
89,893
598,111
15.9
35,952
723,955
623,145
10.4
60,115
68.7
6,189
725,136
2018E
29,691
18,172
74,381
104,072
678,728
13.5
39,547
822,347
708,323
13.7
66,127
10.0
6,498
823,528
27 July 2017
8

L&T Finance Holdings
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg Yield on Loans
Avg. Yield on Earning Assets
Avg. Cost-Int. Bear. Liab.
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
Int. Expended/Int.Earned
Other Inc./Net Income
Efficiency Ratios (%)
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset Quality (%)
Gross NPAs
Gross NPAs to Adv.
Net NPAs
Net NPAs to Adv.
VALUATION
Book Value (INR)
Price-BV (x)
EPS (INR)
EPS Growth YoY
Price-Earnings (x)
Dividend per share (INR)
Dividend yield (%)
E: MOSL Estimates
2013
12.8
12.8
9.4
3.3
5.0
2014
13.1
12.8
9.6
3.3
4.7
2015
13.4
13.1
9.2
3.9
5.2
2016
12.9
12.5
8.8
3.7
5.0
2017
12.7
12.1
8.3
3.8
4.9
2018E
12.7
12.0
7.8
4.2
5.2
2019E
12.7
12.0
7.8
4.2
5.1
2020E
12.7
11.9
7.7
4.2
5.1
14.2
2.3
61.0
10.5
9.2
1.5
63.1
16.9
12.5
1.8
60.4
15.7
10.2
1.5
60.5
19.5
12.4
1.5
59.5
20.3
15.6
1.9
57.2
27.4
19.1
2.3
57.4
27.8
19.8
2.5
57.3
28.6
37.4
32.9
42.2
30.0
38.9
32.7
39.2
37.1
32.4
38.7
28.5
0.0
26.4
0.0
25.4
0.0
6,596
2.0
4,063
1.3
12,430
3.2
8,895
2.3
14,281
3.1
9,630
2.1
17,354
3.1
11,540
2.1
24,900
3.9
14,610
2.3
31,769
4.4
18,616
2.6
36,352
4.4
21,015
2.6
41,884
4.4
24,238
2.6
31.9
4.2
59.8
0.8
33.9
3.0
-28.8
0.7
37.1
4.4
46.9
0.8
40.4
3.9
-11.7
0.8
44.3
3.6
5.2
33.7
30.8
0.9
0.6
50.9
3.2
7.3
39.7
22.0
1.0
0.6
60.0
2.7
10.6
44.9
15.2
1.4
0.8
71.0
2.3
13.0
22.4
12.4
1.6
1.0
27 July 2017
9

L&T Finance Holdings
Corporate profile: L&T Finance Holdings
Company description
Exhibit 1: Exhibit 19: Sensex rebased
L&T Finance Holdings (LTFH) in the holding
company for all finance-related activities of the
L&T Group. LTFH is among the largest NBFCs in
India with a loan book in excess of INR650b and
with 700+ points of presence across 24 states. It
operates in retail/wholesale lending, as well as
across 2W finance, tractor finance, microfinance,
home loans/LAP, builder finance, infra finance and
structured finance among other product lines. LTFH
is rated AA+ by CARE. Mr Dinanath Dubhashi serves
as MD & CEO of the company. He was promoted to
the position of Managing Director in July 2016.
Exhibit 10: Shareholding pattern (%)
Jun-17
Promoter
DII
FII
Others
64.2
4.1
11.0
20.8
Mar-17
66.6
3.7
11.3
18.4
Jun-16
66.7
2.0
10.0
21.3
Exhibit 11: Top holders
Holder Name
CITIGROUP GLOBAL MARKETS MAURITIUS PRIVATE
BC ASIA GROWTH INVESTMENTS
BC INVESTMENTS VI LIMITED
Prazim Trading And Investment Co. Pvt. Ltd.
% Holding
5.5
3.5
1.8
1.3
Note: FII Includes depository receipts
Exhibit 12: Top management
Name
Shailesh V Haribhakti
Dinanath Dubhashi
Apurva Rathod
Designation
Chairman
Deputy Managing Director
Company Secretary
Exhibit 13: Directors
Name
B V Bhargava
Harsh Mariwala
Nishi Vasudeva *
Vaishali Kasture *
Name
P V Bhide
R Shankar Raman
Thomas Mathew T
*Independent
Exhibit 14: Auditors
Name
B K Khare & Co
Deloitte Haskins & Sells LLP
Naina R Desai
Sharp & Tannan
Type
Statutory
Statutory
Secretarial Audit
Statutory
Exhibit 15: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
7.3
10.6
13.0
Consensus
forecast
7.4
10.9
13.5
Variation
(%)
-1.4
-2.8
-3.7
27 July 2017
10

L&T Finance Holdings
NOTES
27 July 2017
11

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L&T Finance Holdings
Disclosure of Interest Statement
§
Analyst ownership of the stock
L&T Finance Holdings
No
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Registration details of group entities.: MOSL: NSE (Cash): INB231041238; NSE (F&O): INF231041238; NSE (CD): INE231041238; BSE (Cash): INB011041257; BSE(F&O): INF011041257; BSE(CD); MSE(Cash): INB261041231;
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27 July 2017
12