L&T Finance shares fall 8% post Q4 earnings, check details

L&T Finance Holdings clocked a significant fall in its stock price, slipping over 8% in intraday trading, despite reporting a 15% rise in consolidated net profit for Q4 FY2024-25. This marks the worst intraday session for the company's shares since April 7 of this year. The stock fell 8% to ₹158.2 but later was recouped losses to trade 2.64% lower at ₹168. In contrast, the Nifty50 saw a 1.22% advance. The company's total income for the quarter increased to ₹4,027 crore, with interest income growing to ₹3,750 crore, yet the market's reaction was notably negative.

In a strategic move, L&T Finance is set to enter the gold loan market. The company has signed a business transfer agreement with Paul Merchants Finance Private Limited for the acquisition of their gold loan business. This acquisition aligns with L&T Finance's strategy to "expand its secured, high-yielding loan portfolio." The company expects this move to "accelerate the scaling of its gold loan business by approximately 36 months," offering a "high-quality, profitable gold loan franchise with an attractive return on assets profile at a favourable valuation."

Over the past year, L&T Finance shares have risen by 22%, outperforming the Nifty50's 2.8% advance. However, the recent drop in share price indicates market concerns despite the company's positive earnings report. The acquisition of the gold loan business is anticipated to enhance L&T Finance's growth prospects, yet investors remain cautious. The company's market capitalisation stands at ₹41,414.81 crore, and its recent performance highlights both the challenges and opportunities within the financial sector.