External broker reports(aggregated public sources), Emkay Global Financial Services Limited

Emkay

External broker reports(aggregated public sources)

Emkay Global Financial Services Limited

Emkay Global Financial Services Ltd. is a leader in the financial services sector, actively creating wealth for our clients for over two decades. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>Apollo Global Management is in advanced talks with LTFH to acquire real estate loans worth Rs80-90bn in a deal pegged at $1bn, reported The Economic Times</li><li>The report suggests the deal is expected to be finalized in the next few weeks. </li><li>The transaction will help LTFH get upfront cash, which it could use to deleverage the balance sheet and move toward its aim of becoming a retail-focused NBFC.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Apollo Global Management is in advanced talks with LTFH to acquire real estate loans worth Rs80-90bn in a deal pegged at $1bn, reported The Economic TimesThe report suggests the deal is expected to be finalized in the next few weeks. The transaction will help LTFH get upfront cash, which it could use to deleverage the balance sheet and move toward its aim of becoming a retail-focused NBFC.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

L&T Finance Holdings - Real Estate Asset Sale to Accelerate Retailization

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

L&amp;T Financial Holdings (LTFH) has entered into a definitive agreement with HSBC AMC, in which the latter will acquire 100% stake in L&amp;T Investment Management (LTIM), the investment manager of L&amp;T Mutual Fund (LTMF), for USD425m. In addition, LTFH will also be entitled to excess cash (INR57b) in LTIM's books until the completion of this divestment/acquisition. Including the excess cash (except the minimum cash requirement of INR0.5-1b) that LTFH is entitled to, the total sale consideration would be INR37-39b (4.6-4.8% of current AUM).<div class="content-highlight">Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</div>

L&amp;T Financial Holdings (LTFH) has entered into a definitive agreement with HSBC AMC, in which the latter will acquire 100% stake in L&amp;T Investment Management (LTIM), the investment manager of L&amp;T Mutual Fund (LTMF), for USD425m. In addition, LTFH will also be entitled to excess cash (INR57b) in LTIM's books until the completion of this divestment/acquisition. Including the excess cash (except the minimum cash requirement of INR0.5-1b) that LTFH is entitled to, the total sale consideration would be INR37-39b (4.6-4.8% of current AUM).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Divestment of its Asset Management business will further strengthen the balance Sheet

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

*Results Down, Credibility Continues To Decrease: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 1Q22 bottom-line results of 1.8 bn, declining INR 890 mn (33.3%) linked quarter. Results were weaker across the board;  and  *Accelerating Negative Credit Delta: Inclusive of NCOs of INR 8.5 bn or 3.62% annualized total loans, we note that net new NPLs skyrocketed INR 12.0 bn or increasing an eye popping 106.7% on an annualized basis during the period. By our calculation, if the large blip in credit continues, LTFH  management ought to think about adding another INR 69 bn plus to the reserve. A hit this large represents over seven years of PBT or 6.3x average equity.

*Results Down, Credibility Continues To Decrease: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 1Q22 bottom-line results of 1.8 bn, declining INR 890 mn (33.3%) linked quarter. Results were weaker across the board;  and  *Accelerating Negative Credit Delta: Inclusive of NCOs of INR 8.5 bn or 3.62% annualized total loans, we note that net new NPLs skyrocketed INR 12.0 bn or increasing an eye popping 106.7% on an annualized basis during the period. By our calculation, if the large blip in credit continues, LTFH  management ought to think about adding another INR 69 bn plus to the reserve. A hit this large represents over seven years of PBT or 6.3x average equity.  

L&T Finance Holdings – Struggling To Survive

*NIM Driven Bottom-line: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 3Q21 operating results of INR 2.9 bn, increasing INR 260 mn (9.8%) linked quarter. Much of LTFH’s strength during the quarter was attributed to net interest income growth of INR 2.1 bn (15.8%) associated with improving cost of funds (down 72 bp linked quarter) on liquidity improvement.*Credit Risk Challenges: While LTFH would like to have the investment community believe that it has turned the corner with credit, that notion is patently false. Inclusive of INR 12.8 mn in NCOs, we calculate a continued acceleration of net new NPL growth to 101% on an annualized basis – which is troubling. We calculate that reserves need a boost close to INR 80 bn or nearly five years of pre-tax earnings; and   *Banking License May Be Out of Reach: LTFH's Tier-1 ratio was 17.8% at FY 3Q21. However, if our reserve shortfall analysis is correct, LTFH’s stated Tier 1 capital ratio will be quite challenged, leaving it short of the Reserve Bank of India’s (RBI) plan for larger NBFCs to become banks.

*NIM Driven Bottom-line: L&amp;T Finance Holdings (LTFH.IN) [LTFH] reported FY 3Q21 operating results of INR 2.9 bn, increasing INR 260 mn (9.8%) linked quarter. Much of LTFH’s strength during the quarter was attributed to net interest income growth of INR 2.1 bn (15.8%) associated with improving cost of funds (down 72 bp linked quarter) on liquidity improvement.*Credit Risk Challenges: While LTFH would like to have the investment community believe that it has turned the corner with credit, that notion is patently false. Inclusive of INR 12.8 mn in NCOs, we calculate a continued acceleration of net new NPL growth to 101% on an annualized basis – which is troubling. We calculate that reserves need a boost close to INR 80 bn or nearly five years of pre-tax earnings; and   *Banking License May Be Out of Reach: LTFH's Tier-1 ratio was 17.8% at FY 3Q21. However, if our reserve shortfall analysis is correct, LTFH’s stated Tier 1 capital ratio will be quite challenged, leaving it short of the Reserve Bank of India’s (RBI) plan for larger NBFCs to become banks.

L&T Finance Holdings – Credit Risk Jeopardizes Bank License

Specialist in Indian Banking and Economic Research

Hemindra Hazari

Post the public disclosure of bank borrowings by the board of IL&amp;FS, where the scale of Indusind Bank’s unsecured exposure to the insolvent parent company became apparent, the bank finally disclosed its total exposure to the beleaguered leviathan in the late hours of October 31. In the analysts call arranged by the bank the following day to discuss this disclosure, nobody in the senior management of the bank was held to account for 8% of the bank’s capital going up in smoke. (Nor did the servile sell-side analysts demand such accountability.) The absence of basic financial analysis by the bank for providing the Rs 20 bn bridge loan may well be an example of how Indusind Bank evaluates large ticket loans. Investors should be concerned about how many such loans have been liberally handed out to book lucrative fees upfront. The stock market, though, rewarded the bank for its disclosure, and the stock closed 2.8% up in a flat market.

Post the public disclosure of bank borrowings by the board of IL&amp;FS, where the scale of Indusind Bank’s unsecured exposure to the insolvent parent company became apparent, the bank finally disclosed its total exposure to the beleaguered leviathan in the late hours of October 31. In the analysts call arranged by the bank the following day to discuss this disclosure, nobody in the senior management of the bank was held to account for 8% of the bank’s capital going up in smoke. (Nor did the servile sell-side analysts demand such accountability.) The absence of basic financial analysis by the bank for providing the Rs 20 bn bridge loan may well be an example of how Indusind Bank evaluates large ticket loans. Investors should be concerned about how many such loans have been liberally handed out to book lucrative fees upfront. The stock market, though, rewarded the bank for its disclosure, and the stock closed 2.8% up in a flat market.

Is IL&FS the Only Cockroach in Indusind Bank’s Portfolio?

India

L&T Finance Holdings Limited is a financial holding company. The Company offers a diverse range of financial products and services across the corporate, retail, and infrastructure finance sectors, as well as fund products and investment services.

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L&T Finance Holdings (LTFH IN)

L&T Finance Holdings - Real Estate Asset Sale to Accelerate Retailization

Apollo Global Management is in advanced talks with LTFH to acquire real estate loans worth Rs80-90bn in a deal pegged at $1bn, reported The...

Emkay

Divestment of its Asset Management business will further strengthen the balance Sheet

L&T Financial Holdings (LTFH) has entered into a definitive agreement with HSBC AMC, in which the latter will acquire 100% stake in L&T Investment...

Motilal Oswal

L&T Finance Holdings – Struggling To Survive

L&T Finance Holdings: LTFH reported FY 1Q22 bottom-line declined 33.3% QOQ. Results were weak across the board. LTFH's reserve is short INR 69 bn...

Thomas J. Monaco

L&T Finance Holdings – Credit Risk Jeopardizes Bank License

L&T FINANCE: LTFH reported a FY 3Q21 result increase of 9.8% linked quarter. Continued acceleration of net new NPL growth and a reserve shortfall...

Thomas J. Monaco

Is IL&FS the Only Cockroach in Indusind Bank’s Portfolio?

Post the public disclosure of bank borrowings by the board of IL&FS, where the scale of Indusind Bank’s unsecured exposure to the insolvent...

Hemindra Hazari

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