L&T Finance Shares In Sell-Off Mode Despite All-Time High Net Profit & Dividend In FY25: BUY/SELL?

Despite reporting strong financial results for the quarter and fiscal year ending March 31, 2025, L&T Finance Ltd.'s shares saw significant sell-off pressure on Monday. Even though L&T Finance Holdings Ltd. had an all-time high consolidated full-year Profit After Tax (PAT) of Rs. 2,644 Crore in FY25, indicating 14% Year-on-Year (YoY) growth, the company's shares have seen a major fall on the NSE as of April 28, 2025. Around 2:32 pm IST, the stock was trading 4.20% lower on the NSE at Rs 165.73 per share after opening the day lower at Rs 162.70 apiece compared to the previous closing of Rs 172.99.

L&T Finance Dividend

The Board of Directors "Recommended a final dividend of Rs. 2.75 per Equity Share (face value Rs. 10 per share) for the financial year 2024-25. The dividend, if approved by the Members at the forthcoming Annual General Meeting ("AGM") will be credited / dispatched within 30 days from the date of AGM," said L&T Finance in a stock exchange filing.

This is the highest dividend the company has ever announced.

L&T Finance Q4FY25 Results

The net profit of L&T Finance increased 14.9% YoY to Rs 636.2 crore in Q4FY25 from Rs 553.9 crore in the same period the previous year. Additionally, the net interest income (NII) of the firm increased by 3.8% to Rs 2,423.2 crore from Rs 2,335.3 crore in Q4FY24. In a regulatory statement, L&T Finance stated that the NBFC's total income for the quarter climbed to Rs 4,027 crore from Rs 3,676 crore in the same period last year. This quarter, the gross non-performing assets (NPA) ratio increased marginally to 3.29% from 3.23% Q3FY25 and 3.15% in Q4FY24. The net NPA ratio for the company increased from 0.79% YoY to 0.97%.

Disbursements grew by 11% YoY to Rs. 60,040 Crore in FY25, while the retail book saw a robust 19% YoY growth to conclude at Rs. 95,180 Crore. In order to acquire Paul Merchants Finance Pvt. Ltd.'s gold loan business, the company has signed a Business Transfer Agreement with them. Retail disbursements for the firm in Q4FY25 were Rs. 14,899 crore, up from Rs. 15,044 crore the year before. According to L&T Finance, RoE was 10.13 in FY25 vs. 9.53% in FY24, up 60 bps YoY, while RoA was 2.22% vs. 2.19%, up 3 bps YoY.

Commenting on the financial results, Mr. Sudipta Roy, Managing Director & CEO of LTF said, "In a year marked by considerable headwinds, our performance remained resilient while showcasing our ability to thrive even in a challenging environment. This stability is underpinned by our unwavering commitment to strong asset quality reinforced by a strong focus on collection efficiency across businesses. We believe the financial year 2024-25 marks a significant step in laying the foundation for sustainable and predictable growth going forward.

"Operationally, we made significant strides with the successful 100% implementation of 'Project Cyclops' 2.0, our next-gen AI-ML based credit underwriting engine, in Two-wheeler Finance, and its ongoing rollout in Farm Equipment Finance. Furthermore, our large partnerships with PhonePe, CRED, and Amazon Pay, launched in the financial year 2024-25, are gaining momentum. During the year, while we remained focused on strengthening our risk and credit frameworks, we equally worked on building capabilities, both on the technology and people front, which will serve us well in times to come," he added.

"Looking forward, our focus remains on delivering quality services to our customers. We are confident that our commitment to operational excellence, customer centricity, strong governance, and prudent risk management, all powered by a digital-first approach, will sustain our growth momentum as we continue to build a customer-focused, digital-native financial services powerhouse," Sudipta Roy further stated.

L&T Finance Share Price Target

"L&T Finance stock price is slightly bullish on the Daily charts with strong support at 158. A Daily close above resistance of 173 could lead to a target of 190 in the near term," commented A R Ramachandran, Independent Research Analyst.

Disclaimer

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