L&T Finance falls 8%; here’s why stock snapped 5-day gain

Shares of L&T Finance Holdings (LTFH), a leading non-banking financial company (NBFC), ended a five-session gaining streak on Thursday as investors resorted to profit booking after a strong rally in the recent past. The stock price declined nearly 8% amid spurt in volume trade in a subdued broader market.

At 11:00 AM, L&T Finance shares were trading 6.9% lower at ₹82.5 on the BSE, as against 0.1% fall in the benchmark index Sensex. The stock opened higher at ₹89.15 against the previous close price of ₹88.65, but soon pared gains to hit a low of ₹81.8, down 7.8% on the BSE.

In the first two hours of trade so far, 38.4 lakh shares worth ₹32.5 crore changed hands over the counter as compared to the two-week average volume of 54.38 lakh. The market capitalisation of the midcap stock slipped to ₹20,410.8 crore.

In the last five trading sessions, the stock rallied 22% after its promoter Larsen & Toubro (L&T) purchased 55.75 million equity shares representing a 2.3% stake in the company via open market transaction. The stock has risen 31% in one month, while it dropped 5% on a year-to-date (YTD) basis. LTFH shares have given a negative return of 16% in one year and 44% over a three-year period.

On Wednesday, L&T Finance shares gained as much as 16.2%, the highest since their listing, after L&T raised stake in the company through bulk deals and market purchases. The stock hit a 52-week high of ₹101.10 on June 15, 2021, and a 52-week low of ₹58.50 on March 7, 2022.

As per the exchange data, L&T acquired 21.22 million shares at an average price of ₹83.52 on the NSE, while it bought another 20.27 million shares from the BSE. The combined value of the transaction is expected to be around ₹348 crore.

The rally in stock price was also attributed to deal with Hero Electric to provide financing solutions to customers. Last week, Hero Electric teamed up with L&T Finance to offer consumers easy financing solutions for its entire product portfolio across its 750-plus dealership network. As part of the tie-up, customers can avail finance with no hypothecation, hassle-free-quick loan approvals in under three minutes, at attractive interest rates ranging from 7.99% onwards, the electric two-wheeler maker said in a statement.