Our analysts recommend a buy on L&T Finance shares.

L&T Finance is a leading player in the Indian financial sector, led by a seasoned management team. Under its new MD, Sudipro Roy, the company is focusing on developing future-ready technology, such as AI and ML-driven initiatives, to enhance operational efficiency and drive product penetration across urban and rural markets. The company’s asset quality remains strong, with a gross NPAs of 3.19% and net NPAs of 0.8%, driven by conservative underwriting and a focus on low-risk segments. The company also maintains a strong portfolio by reducing high-leverage exposure and focusing on low-indebtedness customers. We expect a healthy AUM CAGR of 17% over FY24-27, driving positive profit growth. We maintain a Buy rating with a target price of ₹204, despite the risk of more-than-anticipated delinquencies in the MFI book and a general slowdown in economic activity.