Buy L&T Finance Holdings, target Rs 238: Emkay Global Financial Services

Emkay Global Financial Services has a buy call on L&T Finance Holdings Ltd. with a target price of Rs 238. The current market price of L&T Finance Holdings Ltd. is Rs 166.

The time period given by the brokerage is a year when L&T Finance Holdings Ltd. price can reach the defined target. L&T Finance Holdings Ltd., incorporated in 2008, is a largecap company with a market cap of Rs 33089.61 crore.

Investment rationale by Emkay Global

L&T Finance Holdings (LTFH) has successfully transformed its lending business to focus on ROEs and sustainable growth. Consolidated ROE has improved from 10% in FY16 to ~15% in FY18. Being a diversified financial services player, LTFH has multiple levers of growth (~7 product lines under 3 business verticals in the lending business). Moreover, a robust and sustainable fee income franchise helps it to maintain profitability. We expect this will enable LTFH to clock consolidated PAT CAGR of 40% over FY18-20E.