L&T Finance on the buzz

L&T Financel Holding is doing well today, up over 1.5% at Rs.80.50, with an intra day high at Rs.81. The stock’s 52-week high is at Rs.97.35.

The stock is buzzing today as it is expected to declare its Q4FY13 and FY13 numbers today. Market capitalisation of the company currently stands at Rs 13,818 crore.

Expectations are that it will declare a set of robust numbers. But after the company had announced its Q3 numbers, the stock had tumbled down. It had reported a consolidated net profit at Rs.295 crore, up almost three times on YoY but the market was too enthused with this surge as this was thanks mainly to one time gain of Rs.175 crore, which included profit on sale of stake in Federal Bank and costs related to integration of Fidelity's mutual fund business.  And excluding this gain, net profit was up 27%, which was not bad at all. But the market felt let down with this 27% rise after seeing a 3 fold rise.

At the time of declaring its Q3 numbers, the company had sounded a cautious about the future and stated that despite reform measures initiated by the Govt, tight liquidity, mounting fiscal/current account deficit is impacting the investment climate. It expects stress in the corporate sector to continue for some time and said that its margins will improve only when external, macro environment will improve. Post the performance, research firm Macquarie downgraded the stock to underperform rating, stating that the stock had outperformed the index by nearly 50% on hopes of getting a banking license. It said that the valuations are very expensive considering the losses in the AMC business and weak profitability. This weighed more heavily on the market than the Q3 numbers. A strong contender for getting the banking license, the stock is expected to remain in the spotlight in the days to come.