L&T Finance shares hit fresh 52-week high after Citi maintains ‘buy’ rating for 16% potential gains

Shares of L&T Finance in Tuesday’s trade (July 2) after marking their fresh 52-week high in early trade pared their gains and traded lower. At the last count, shares traded with a cut of 0.16 per cent or Rs 0.3 at Rs 189.7 apiece on the BSE, while it scaled a fresh 52-week high of Rs 193.40 after gaining nearly 2 per cent.

The recent spurt in the stock price of the investment company comes as global brokerage Citi continued with its ‘buy’ rating on the counter with a raised target price of Rs 221 from the earlier pegged Rs 204. The new set target implies potential gains of over 16 per cent.

Citi has opened a 90-day positive catalyst watch on the counter and believes Q1FY25 should fuel improved growth trajectory at the NBFC, supporting ROA or return on assets sustenance. 

Further, the brokerage believes the company is well on track with retail disbursements or AUM growth of 30 per cent, while the overall AUM growth trend is estimated to improve to 13 per cent on-year.

On Monday (July 1), UBS initiated its ‘buy’ rating on the counter with a target of Rs 230. UBS said that the infrastructure company’s arm is now on a path to expand its balance sheet after over 5 years, as it nears completion of its loan book shift from wholesale to retail. The brokerage further stated that L&T Finance has a leading rural portfolio accounting for 45 per cent of the total AUM and stands to benefit from a likely government increase in rural spend.  Additionally, it added that the market is underestimating its ROA or return on assets trajectory.

UBS believes the risk-reward of the company is favourable and the stock is trading at1.6X FY26E P/B.

L&T share price performance

Shares of the NBFC in the last one year have gained 48.5 per cent, while its YTD return is at 15 per cent.