Our 7th company in the Series of Best Stocks Below Rs. 100 is L&T Finance Holdings Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
L&T Finance Holdings Limited is a non-banking financial institution-core investment company.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹20,945cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 21.57
Sector PE Ratio: 27.35
PE Ratio of this company is low but better than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 1.10
Sector PB Ratio: 2.32
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 0%
Sector Dividend Yield : 0.53%
Dividend Yield of this company is zero. No Dividend is provided by this company.
ROE: 5.17%
ROCE: 12.03%
ROE (Return on equity) and ROCE (Return on capital equity) is Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 14,305.71 | 970.94 |
| 2020 | 14,476.75 | 1,700.17 |
| 2019 | 13,368.82 | 2,226.30 |
| 2018 | 10,266.26 | 1,254.68 |
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 89,976.41 | 94,615.93 | 92,379.05 | 76,142.20 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 89,976.41 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 5,411.72 | 2,082.05 | -11,734.65 | -15,722.96 |
Debt Level: L&T Finance Holdings Ltd debt to equity ratio (467.2%) is considered high.
Reducing Debt: L&T Finance Holdings Ltd debt to equity ratio has reduced from 613% to 467.2% over the past 5 years.
Debt Coverage: L&T Finance Holdings Ltd debt is not well covered by operating cash flow (6.2%).
Interest Coverage: Insufficient data to determine if L&T Finance Holdings Ltd interest payments on its debt are well covered by EBIT.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 63.59% | 8.79% | 1.62% | 4.91% | 21.10% |
| Mar 2021 | 63.62% | 10.60% | 0.78% | 5.02% | 19.99% |
| Dec 2020 | 63.62% | 9.68% | 0.33% | 5.00% | 21.37% |
| Sep 2020 | 63.65% | 9.36% | 0.23% | 4.95% | 21.80% |
Above table showing there is no big change in Promotors holding which is 63.59% in June 2021. FIIs invested in June 2021 with 8.79% and retail investor is 21.10%.
Now We’ll check the return of the company, This company started from Rs. 44.78 at 17 Aug 2011. This company given 43.30% returns in last 1 year from 2020 to 9 Sep 2021.
Investment Checklist for L&T Finance Holdings Ltd.
- The company is currently profitable
- Earnings are forecast to grow by an average of 33% per year for the next 3 years
- They do not pay a dividend
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins decreased but not substantially
- They have sufficient analyst coverage
- No concerning events detected
- Revenue is meaningful (₹72B)
- Market cap is meaningful (₹206B)
- Debt is not well covered by operating cash flow
- Significant insider selling over the past 3 months
- Shareholders have been diluted in the past year
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 75 to 80
Target: 110 (35% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 7th company in the Series of Best Stocks Below Rs. 100 . We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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