Emkay Global upgrades L&T Finance to buy; stock clocks 52-week high

Shares of L&T Finance Holdings soared in the early trade on Wednesday, January 3, and clocked a 52-week high of Rs 170.8 apiece on the BSE, thereby snapping a two-day losing streak. The stock drew buyers' interest after the brokerage, Emkay Global, upgraded the stock to 'buy' from 'reduce'.

At around 10:24 a.m., shares of L&T Finance Holdings traded 3.05 per cent or Rs 4.95, higher at Rs 167.15 apiece. The market capitalisation of the company stood at Rs 41,579.87 crore.

Emkay Global upgraded L&T Finance Holdings to 'buy' and increased the target price from Rs 155 to Rs 190 apiece. The brokerage sees over 17 per cent upside in the stock from Tuesday's closing.

It is bullish on L&T Finance as it notes that the company is on the verge of completing the 'Lakshya 2026' led retailisation plan.

Further, Emkay Global underlines that the company has established itself as a retail lender and has built sustainable moats around its key segments of rural financing, two-wheeler financing, and farm equipment financing.

According to the report, the plan has helped to increase the share of retail loans to 90 per cent.

"Now, its retail assets, comprising over 90 per cent of the loan book, its sustainable moats in rural, 2W, and farm equipment segments, and a strong balance sheet with material macro-prudential provisions and a prudent asset valuation buffer give enough comfort for sustained profitable growth," the report added.

The brokerage believes that the company's return on assets (ROA) may exceed 3 per cent by FY26, and it will get benefits from entry into new business cards, gold loans, and micro-LAPs (loans against property). Emkay believes it can all happen under the leadership of MD and CEO Sudipta Roy.

L&T Finance Holdings share price: Past performance

Shares of L&T Finance Holdings have gained over 86 per cent in a year, as compared to the Nifty50's rise of over 18 per cent during the same period.

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