Every company needs attention on what it does / how it does and what are the risk/reward…
L&T name makes no much difference …
IL&FS fiasco happened as it had govt of india company tag …
Better track company based on merit and not on illusion …
1 Like
Always the case…Knowing the company, the Parent, and their style of operations is key. Stop loss even if it is mental, is key. Selling at the UTL level (TA stuff) is also key. For example, I am selling two top name IT stocks right now, since my target is reached and I am not looking back. Both of these are new highs, and that is not the reason, but they have achieved my goals. Since we are talking about LnT Finance, I am choosing not even to name them (so please do not ask) - Moderators here are strict!
KKP
1 Like
So, when the time comes for LTFin to be at those levels, it does not matter to me that they are part of LnT. It will be gone from my portfolio to only buy it back at lower levels.
But, that does not make me a trader, since I will hold stocks for 10, 20 and 30 years. Prudence of taking profits from time to time for good stocks in the portfolio is a good thing, since there is always another, and yet, stocks like RIL go up and down, and give enough opportunity to buy and sell. But, one should not become a trader in the meantime.
KKP
1 Like
The Supreme Court judgement in the Amarapali case could be a big advantage to Piramal and L&T Finance which claim to continuously monitor the progress of a project. On the other hand PSU banks sat tight after giving funds to the developer:
https://www.dnaindia.com/business/report-amrapali-ruling-may-hit-lending-to-realty-sector-2775130
Banks are weighing the option of filing a review petition in the Supreme Court as they fear the apex court’s verdict in the Amrapali case
can leave them with financial holes while solely protecting the interests of the homebuyers.
If the judgement becomes a precedent for other future cases, this could lead banks slowing down their lending to the real estate sector. The Supreme Court on Tuesday said that the homebuyers need not repay the
banks, and the banks will have to get back their money by selling off other assets of the Amrapali group. This, the court said, was necessary because the banks did not monitor the end use of the funds.
“The Supreme Court verdict may set a precedent for future cases. If the developer for some reason siphons off the money, the banks will be unable to recover their loan amount. It will put brakes on bank lending to the real estate sector,” said a banker.
Results have been good for L&T Finance, ILF&S threat is also removed with their exposure marked Green. DHFL exposure is provisioned for. Agree growth is impacted.
Still sharp correction from around 150 levels just before quarter results to almost 90 levels few days back.
What is market waiting for or what was it expecting before result for it to rule at 150 then?
Is it the slowdown in growth that bothered or provisioning for DHFL or expectations of more bad assets or inability to raise funds (which so far is not the case) or something else?
Do we consider it as a troubled NBFC? Is it Amber, Green or Red NBFC in today’s situation? According to me it seems to be weathering the storm well, raising funds is not an issue, slowdown in growth seems a conscious decision and not lack of funds, Management is spot on on their decisions so far - They did finally got ILFS green, they were confident enough since beginning that it will be green. Is the street bothered that although green, the money would not come back?
I am trying to understand reasons for its sharp fall from before results level
Disc: Invested and discussing only for learning fundamentals purpose
2 Likes
They have moved their wealth management business into de-focused category now. If i am not wrong, its around 8K crores. What happened there suddenly? CEO was not convincing enough to justify it just by saying that they are not able to grow there. The question is how it was identified as a focused area around couple of years back then.
Regards,
Suhag
In last couple years, likes of Piramal have defocussed entire shriram capital business, indiabulls housing is ending it’s independent existence etc. Compared to all that, wealth management business of L&t is miniscule. Not justifying any action, just wanted to highlight how tough the macros have been to result in unprecedented decisions for many groups in NBFCs…
1 Like
The deal happened at 1% of AUS that comes 250cr. As their asset under service at 25000cr and revenue for last year on through this vertical 125cr . Seems like their most of their clients are debt oriented portfolio ,so 1% of AUS is it looks reasonable deal?
Icra downgraded rating outlook for ltfh from AAA stable to negative owing to ltfh wholesale loan exposures
Regards,
Sathish
Hi,
What about the results… is it positive? DTA is one time, if you compare without DTA, the results look good… any expert opinion? I feel, it is better placed to grow, and promising compounder… is my view fine?
Hi, if you ask my personal opinion, I think results are average. Growth seem to come back a little. Asset quality is stable. No mention so far on impact of Altico, Indiabulls etc etc. I think as @hitesh2710 Sir mentioned - This sector was better to be avoided long back as it took severe hit from its good days. Even great parentage like L&T could not stop its stock to fall 60% from peak. 2 years lost and 60% down from peak on my once largest holding is my story so far in this stock. I do not know what lies in future for this sector. L&T so far has not done anything awkward but has gained strength in this sector. Not even experts know about revival. One thing is what I know is if I had to start from a blank slate and wanted to use this crisis opportunity to buy any beaten down NBFC, it would have been L&t only…and that’s the only reason I am holding it so far.
Disc: This is not a buy/sell recommendation. Holding it since IPO days. Wanted to sell in NBFC crisis period but could not sense the magnitude of crisis earlier. Sold small quantity at 150/120 levels and bought some at 80
2 Likes
InCred Capital has agreed to acquire 100% stake in the West Asian wealth management business of L&T Finance Holdings.
The wealth and asset management unit of lender InCred Financial Services would buy the stake for Rs 18.03 crore ($2.5 million at current exchange rate) plus the cash and equivalent of L&T Capital Markets (Middle East). L&T Finance expects the sale within 10 months from the execution of the share purchase agreement.
Read details here
Anyone aware why the recent spurt in stock price in last 4 trading sessions? It rose almost 35%. Only news in public domain is of it raising 60 Cr. Now that is not too much money. Also with recent resolution of Essel group, they could get around 250 Cr - If I am not wrong that ws their exposure. Pls correct me if wrong. Anything am I missing here as I am not able to understand this very sudden change of sentiments.
market is looking several months or quarters ahead. IL&FS problems are behind the company with several road projects being sold. loans to supertech are also being recovered with projects getting completed. moreover L&T’s team is closely working with the company to stabilize its real estate portfolio. We should expect some fund raising by L&T finance holdings in the coming quarters. Remains to be seen whether it is in the form of a placement with big investors or/and a rights issue.
disclosure: holding
shiv kumar
2 Likes
In my opinion, market was pricing like it will be closed and only Bajaj Finance will survive as an NBFC…
I think after closing down of wholesale lending biz, it has become a Gr8 proxy to infrastructure play with pedigree management. When everyone is shifting to retail, someone needs to fund infrastructure also. Rural is thrown alongside it. Management has shown gr8 due diligence in NBFC mayhem and even their RE portfolio remains NPA free (as per reports).
So a play to a non crowded space which everyone is / has vacated.
Dis: Invested
1 Like
l&t fin holdings will be getting into retail also.
With every NBFC stampeding out of wholesale, I am sure the lenders must already be dictating terms and rates.
Today’s rise is largely due to Goldman initiating on the stock with a Buy and INR 140 target. Its also gotten positive momentum from the move first in HDFC AMC and then AB Capital as well as an overall risk-on sentiment that has seen money flowing into beaten down yet established & pedigreed financials.
Certainly.
But i think wholesale is a high risk high reward game as ultimately one is betting on promoter rather than balance-sheet - which itself is under suspicion (Zee paid up and Essar did not !!)
Many i suspect are ever-greening…Hence, not my cup of tea.