Shares of L&T Finance Holdings fell over 3% after global brokerage UBS downgraded the stock to ‘Neutral’ from ‘Buy’. The revision comes in the wake of a sharp 39% rally in the stock over the past three months, which UBS believes has already priced in much of the recent operational improvements—especially in the microfinance segment.
Despite the downgrade, UBS has raised its target price to ₹210 from ₹177, citing steady fundamentals. The brokerage expects loan book CAGR at 20%, with the share of microfinance institutions (MFI) declining from 27% to 24%. However, it highlighted that tight margins and elevated credit costs (2.4–2.5%) may cap improvements in return ratios.
UBS projects a 16% EPS CAGR and Return on Equity (RoE) at 13% by FY27. It also flagged that digital transformation efforts are ongoing, but any substantial results are expected only in the second half of FY26.
UBS added that it would prefer to assess the credit performance from new business initiatives before turning more positive on the stock.
L&T Finance shares opened at ₹183.06 and, at the time of writing, touched an intraday high of ₹185.68, while slipping to a low of ₹180.61 during the session. The stock remains below its 52-week high of ₹197.10 but well above the 52-week low of ₹129.20.
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