L&T Finance Holdings Ltd (LTFH) is a non-banking financial company (NBFC) that provides a wide range of financial products and services. These include financing for farm equipment, two-wheelers, microloans, consumer loans, home loans, loans against property, real estate finance, infrastructure finance, and more.
In terms of its loan portfolio, LTFH has a diverse mix as mentioned below.
- 13% of L&T Finance’s loans are for microloans.
- 12% of loans are for farm equipment financing.
- 8% of loans are for two-wheelers.
- 12% of loans are for home loans and loans against property.
- The remaining 55% of the portfolio comprises loans to wholesale segments.
- This includes real estate finance, infrastructure finance, and other sectors.
Let’s discuss further what would be the share price of L&T Finance by 2025.
Evaluating L&T Finance Share Price Target in 2025
L&T Finance Holdings stock is trading around Rs 118. Analyzing L&T Finance’s historical share price trends reveals its ability to generate consistent returns for investors. Over the past 3 years, the average annual return has been 27%, outperforming the broader market index by 1.5%.
According to the analysts’ consensus, L&T Finance Holding’s stock can reach 150 by 2025 due to strong fundamentals.
Remember that estimating a price target should be based on your own research by analyzing the market trends is essential for making informed investment decisions.
Let’s discuss the Fundamental and Technical analysis of L&T Finance Holdings.
Fundamental Analysis of L&T Finance Holdings
Let’s explore key financial ratios and metrics that provide insights into LTFH’s performance and determine its intrinsic value.
- Earnings per Share (EPS): Over the past five years, LTFH has demonstrated consistent growth in EPS, averaging around INR 6.5. This is because of low-profit growth in the last 5 years.
- Price-to-Earnings Ratio (P/E Ratio): Currently, LTFH’s P/E ratio stands at around 22, indicating that investors are willing to pay 22 times the company’s earnings for its shares. This ratio provides insights into market sentiment and expectations regarding LTFH’s future growth prospects.
- Return on Equity (ROE): LTFH has shown an increase in ROE to 6.42% in FY23 from 4.4% in FY22. The ROE depicts the ability of a company to yield profits from its shareholder’s money in its business.
Technical Analysis of L&T Finance Holdings Stock
In addition to fundamental analysis, technical analysis is also important in getting valuable insights into LTFH share price trends. Let’s explore key technical indicators that can help assess LTFH’s performance.
Current Trend: Analyzing LTFH stock’s current trend, LTFH’s shares are showing a strong uptrend over the last 12 months with the price consistently making higher highs and higher lows.
You can expect the stock to maintain a bullish trend for the next few months.
Exponential Moving Average 200 (EMA200): EMA200 is a widely used indicator to help you determine long-term trends and support/resistance levels.
At present, LTFH’s share price is trading around 118, which is fairly above the EMA 200 value of 90. This suggests a strong bullish trend in the long term.
Analyzing L&T Finance’s Financial Performance
To gauge L&T Finance’s potential for the future, we need to examine its financial performance. Let’s explore some key metrics that will provide valuable insights into the company’s growth trajectory.
- Revenue Growth: L&T Finance has consistently demonstrated robust revenue growth over the years. For instance, in the past five years, its annual revenue has grown at an average rate of 5%.
- Profitability: L&T Finance’s profitability indicators, such as net profit margin and return on equity (ROE), showcase its ability to generate returns for shareholders. the profit growth of stock in the past 5 years is disappointing at merely 1%. But currently, the net profit growth of the last 12 months stands at 48%, and the ROE at 6.42% giving a positive outlook for the company’s performance.
- Debt Levels: Evaluating a company’s debt is crucial for assessing its financial health. L&T Finance has been proactive in managing its debt, with a debt-to-equity ratio of 3.86%, which is quite high but it is normal in the finance sector. L&T should do more efforts to reduce the debt levels to save money for further expansion of the business.
Factors Affecting L&T Finance Holdings Share Price Targets
Several factors influence share prices, and understanding them is crucial for making informed investment decisions. Let’s examine some key factors that impact L&T Finance’s share price potential:
- Industry Trends: The financial services sector in India is witnessing steady growth, driven by increasing urbanization, rising disposable incomes, and government initiatives. L&T Finance’s ability to capitalize on these trends positions it for future success.
- Economic Indicators: Macroeconomic factors, such as GDP growth, interest rates, and inflation, can significantly impact share prices. As India’s economy continues to expand, L&T Finance is well-positioned to benefit from favorable economic conditions.
- Strong Market Position: L&T Finance’s established market presence and reputation provide a solid foundation for future growth. Its diversified portfolio of financial services positions the company to tap into various segments of the market.
- Technological Advancements: L&T Finance has been investing in technology-driven solutions, enhancing operational efficiency and customer experience. This focus on innovation is expected to drive sustained growth and competitiveness.
- Strategic Partnerships: By forging strategic partnerships with key players in the industry, L&T Finance gains access to a broader customer base and leverages synergies to create value. These collaborations enhance the company’s growth prospects in the long run.
As per the experts’ opinion, L&T finance share price target can be around 125 by 2025. We have analyzed factors influencing share prices and evaluated the company’s growth prospects.
While this article provides valuable insights, it’s important to conduct further research and seek professional advice before making investment decisions.
You can also read about other stocks’ target prices –
- Suzlon Share Price Target
- LIC Share Target Price
- Tata Power Share Price Target
- IRCTC Share Price Target
- Adani Power Shares Target Price
L&T Finance Holdings Ltd is a non-banking financial company (NBFC) that offers a diverse range of financial products and services, including loans for various purposes such as farm equipment, two-wheelers, microloans, consumer loans, home loans, and more.
L&T Finance has a diverse loan portfolio. Around 13% of its loans are allocated to microloans, 12% to farm equipment financing, 8% to two-wheelers, and 12% to home loans and loans against property. The remaining 55% of the portfolio consists of loans to wholesale segments, including real estate finance, infrastructure finance, and other sectors.
When evaluating L&T Finance’s fundamentals, it is important to consider its financial performance, including revenue growth, profitability ratios, and debt levels. Additionally, analyzing the company’s competitive advantages, such as its market position, product diversification, and technological innovation, can provide valuable insights. Assessing the quality of management, corporate governance practices, and risk management is also crucial.
Technical analysis helps identify patterns and trends in L&T Finance’s stock price using historical price and volume data. It involves analyzing factors such as trend analysis, support and resistance levels, momentum indicators, volume analysis, chart patterns, moving averages, and Fibonacci analysis. These tools help traders and investors make predictions about potential future price movements based on historical patterns and indicators.
No, technical analysis is not foolproof and should be used in conjunction with other forms of analysis. It provides insights into past price movements and trends, but it cannot guarantee future stock price movements. It is important to consider other factors, such as fundamental analysis, market conditions, news events, and investor sentiments, when making investment decisions.
It is recommended to use a combination of technical and fundamental analysis when making investment decisions. While technical analysis helps assess short-term price movements, fundamental analysis provides insights into a company’s financial health and long-term potential. By considering both approaches, investors can make more informed decisions and reduce risks associated with relying solely on one method.
You can gather more information about L&T Finance Holdings by visiting their official website, reviewing their financial reports and investor presentations, and following reputable financial news sources. Additionally, consulting with a qualified financial professional can provide personalized advice and guidance based on your specific investment needs and goals.