L&T Finance Ltd (LTF) AI Stock Analysis

• Market Cap: ₹653.77B
• Dividend Yield: 0.91%
• Average Volume (3M): 257.63K
• Price to Earnings (P/E): 26.8
• Beta (1Y): 1.72
• Revenue Growth: 15.90%
• EPS Growth: 4.53%
• Country: IN
• Employees: 30,534
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 3.00
• Shares Outstanding: 2,504,386,000
• 10 Day Avg. Volume: 316,895
• 30 Day Avg. Volume: 257,629
• PEG Ratio: 1.05
• Price to Book (P/B): 1.47
• Price to Sales (P/S): 2.40
• P/FCF Ratio: -2.24
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹325.00
• Price Target Upside: 22.00% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 12.03
• Revenue Forecast (FY): ₹112.59B

• Rating: 62 Neutral
• Price Target: ₹262.00 ▼(-1.65% Downside)
• Action: Reiterated Date: 11/08/25
• Date: Action: Reiterated 11/08/25

L&T Finance Ltd's overall stock score is driven by strong financial performance in terms of revenue growth and profitability, despite challenges with leverage and cash flow. The technical analysis indicates bullish momentum, but the stock appears overbought. Valuation metrics suggest the stock is expensive, with a low dividend yield, which may not appeal to value or income investors.

Positive Factors

Strong Revenue Growth & High Gross Margin

Sustained 27% revenue growth and a 61.7% gross margin indicate the core lending business is expanding and retaining healthy interest/fee spreads. This supports durable earnings power, capacity to absorb credit volatility, and funds reinvestment into distribution and digitization over months.

Diversified Lending Franchise & Distribution

A product mix spanning rural, housing, consumer and selective wholesale lending plus branch-led and digital distribution reduces single-segment concentration. This structural diversification supports steady loan origination, geographic reach and resiliency to cyclical stress over the medium term.

Reasonable Return on Equity

A ~10.3% ROE shows the company can generate mid-single-digit returns on equity capital in a capital-intensive lending model. Persisting this ROE level supports shareholder capital efficiency and provides a foundation to grow lending while managing capital allocation over ensuing quarters.

Negative Factors

High Financial Leverage

A D/E of ~3.6 implies heavy reliance on borrowed funds. For an NBFC this raises refinancing and interest-rate sensitivity risks, compresses capital buffers, and heightens vulnerability to funding stress or regulatory changes, posing a sustained constraint on financial flexibility.

Negative Operating and Free Cash Flows

Negative operating and free cash flows mean earnings are not translating into cash, increasing dependency on external funding. Over months, weak cash conversion strains liquidity, raises funding costs, and limits ability to self-finance growth or build cushions against credit shocks.

Compression in EBIT/EBITDA Margins

Falling EBIT/EBITDA margins point to rising operating costs or margin pressure in core lending operations. If persistent, this undermines net profitability resilience, reduces internal capital generation and increases reliance on scale or cost interventions to restore sustainable margins.

L&T Finance Ltd Business Overview & Revenue Model

Company Description

L&T Finance Limited, a non-banking financial company, engages in the provision of various financial products and services in India. It operates through Retail Finance, Wholesale Finance, Defocused Business, and Others segments. The Retail Finance segment provides farmer finance services, that includes farm equipment finance and agri allied finance; rural business finance services, such as micro finance loans and rural business loans; urban finance services, that includes two-wheeler finance, consumer loans, retail housing loans, and loans against property; SME loans; and retail portfolio acquisition services. The Wholesale Finance segment offers real estate finance and infrastructure finance services. The Defocused Business segment provides structured corporate loans and debt capital market services. The Others segment offers asset management services, etc. The company was formerly known as L&T Finance Holdings Limited and changed its name to L&T Finance Limited in March 2024. L&T Finance Limited was incorporated in 1994 and is headquartered in Mumbai, India. L&T Finance Limited operates as a subsidiary of Larsen & Toubro Limited.

How the Company Makes Money

LTF primarily makes money by lending and earning interest and fee-based income. The core revenue stream is net interest income: it raises funds (e.g., through bank borrowings, market instruments, and other permitted funding sources for NBFCs) and deploys those funds as loans; the spread between interest earned on the loan book and interest paid on its borrowings is a key driver of earnings. In addition to interest income, LTF earns non-interest revenue such as processing fees, documentation or service charges, and other lending-related fees associated with originating and servicing loans. Like other lenders, its profitability is also influenced by credit costs (loan losses and provisions), operating expenses (distribution, underwriting, servicing, technology), and its ability to maintain healthy asset quality and collections. Information on specific significant partnerships or partner-led distribution contributing to earnings: null.

L&T Finance Ltd Financial Statement Overview

Summary

L&T Finance Ltd demonstrates strong revenue growth and profitability with a revenue increase of 27.29% and a healthy gross profit margin of 61.72%. However, the company faces challenges with high leverage, indicated by a debt-to-equity ratio of 3.61, and negative cash flows, which could impact long-term financial stability.

Income Statement

L&T Finance Ltd has shown strong revenue growth of 27.29% in the latest year, indicating a robust expansion. The gross profit margin is healthy at 61.72%, and the net profit margin stands at 16.88%, reflecting solid profitability. However, the EBIT and EBITDA margins have decreased compared to previous years, which could indicate rising operational costs or other inefficiencies.

Balance Sheet

The company has a high debt-to-equity ratio of 3.61, which suggests significant leverage and potential risk if interest rates rise or cash flows decrease. The return on equity is moderate at 10.34%, indicating efficient use of equity capital. The equity ratio is relatively low, reflecting a higher reliance on debt financing.

Cash Flow

L&T Finance Ltd faces challenges in cash flow management, with negative operating and free cash flows in the latest year. The free cash flow to net income ratio is slightly above 1, indicating that cash flows are not supporting net income effectively. The negative free cash flow growth rate is concerning and suggests potential liquidity issues.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	164.79B	156.66B	132.36B	123.19B	113.44B	107.03B
Gross Profit	99.89B	96.69B	78.59B	65.21B	55.90B	34.90B
EBITDA	42.36B	36.30B	31.44B	-4.46B	13.22B	13.48B
Net Income	26.99B	26.44B	23.20B	16.23B	10.70B	9.71B
Balance Sheet
Total Assets	1.27T	1.20T	1.03T	1.06T	1.07T	1.09T
Cash, Cash Equivalents and Short-Term Investments	80.81B	108.33B	36.48B	89.04B	60.88B	72.59B
Total Debt	979.70B	923.72B	766.03B	831.05B	848.51B	885.88B
Total Liabilities	1.01T	947.78B	791.90B	847.44B	867.75B	900.01B
Stockholders Equity	263.58B	255.64B	234.38B	215.28B	199.48B	187.73B
Cash Flow
Free Cash Flow	-42.20B	-167.82B	5.67B	65.90B	60.01B	54.12B
Operating Cash Flow	-41.41B	-165.86B	6.86B	67.18B	60.75B	54.64B
Investing Cash Flow	-2.51B	4.71B	8.49B	-3.35B	-50.84B	-20.24B
Financing Cash Flow	36.07B	154.19B	-70.37B	-16.64B	-30.23B	-20.91B

L&T Finance Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 266.40
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:LTF, the sentiment is Negative. The current price of 266.4 is below the 20-day moving average (MA) of 273.31, below the 50-day MA of 284.17, and above the 200-day MA of 256.23, indicating a bearish trend. The MACD of -9.23 indicates Positive momentum. The RSI at 33.56 is Neutral, neither overbought nor oversold. The STOCH value of 14.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:LTF.

L&T Finance Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
IDBI	65 Neutral	₹786.00B	14.17	―	2.08%	11.31%	37.17%
LTF	62 Neutral	₹653.77B	26.76	―	0.91%	15.90%	4.53%
LICHSGFIN	55 Neutral	₹267.36B	5.31	―	1.87%	4.79%	13.08%
IOB	52 Neutral	₹650.87B	12.72	―	―	―	―
M&MFIN	52 Neutral	₹428.16B	8.44	―	2.83%	―	―
MANAPPURAM	49 Neutral	₹219.40B	27.09	―	0.80%	-3.68%	-80.12%

L&T Finance Ltd Corporate Events

L&T Finance Allots 7.98 Lakh Shares on ESOP Exercise

L&T Finance Limited has allotted 798,240 equity shares following the exercise of employee stock options under its 2013 ESOP scheme. The newly issued shares will rank pari passu with existing equity shares and be entitled to future dividends, modestly increasing the company’s equity base while reinforcing its employee ownership and incentive framework.

This allotment reflects the company’s ongoing use of stock-based compensation to align employee interests with shareholder value. For stakeholders, the move signifies a slight equity dilution but also underscores management’s emphasis on retention and performance, which can support long-term operational stability and growth.

L&T Finance Allots 6.1 Lakh Shares Under ESOP Scheme

L&T Finance Limited has allotted 610,900 equity shares following the exercise of employee stock options under its L&TFL Employee Stock Option Scheme – 2013. The newly issued shares will rank pari passu with existing equity shares in all respects, including entitlement to future dividends, resulting in a marginal expansion of the company’s equity base and reflecting the ongoing use of stock-based compensation for employee incentivisation.

L&T Finance Reports 49% Surge in Retail Disbursements, Retail Loan Book Up 21% in Q3 FY26

L&T Finance reported strong operational momentum for the quarter ended December 31, 2025, with estimated retail disbursements of about Rs 22,690 crore, representing roughly 49% year-on-year growth, driven by solid expansion across rural, urban, SME and farmer finance, along with the addition of a gold finance portfolio and higher acquired portfolios. The company’s retail loan book is projected to have grown around 21% year-on-year to approximately Rs 1,11,900 crore, with retailisation improving to 98%, underscoring a deepening shift toward retail assets and signalling continued strengthening of its retail-focused business model; these figures remain provisional and subject to limited review by statutory auditors.