L&T Finance Holdings witnessed a sharp decline in its stock price during intraday trading on Monday, even as the company reported a strong 15% year-on-year (YoY) rise in consolidated net profit for the fourth quarter of the financial year 2024–25 (Q4 FY25).
The company’s stock plunged over 8% to hit a low of ₹158.2 during the session — marking its worst intraday performance since April 7, 2025. However, some recovery was seen later, with the stock trimming losses to trade around 2.64% lower at ₹168 by afternoon. Meanwhile, the broader Nifty50 index advanced by 1.22%, highlighting L&T Finance’s underperformance for the day.
L&T Finance Strong Financials But Weak Market Sentiment
L&T Finance reported a total income of ₹4,027 crore for the quarter, a notable increase from the previous year. Interest income also grew steadily to ₹3,750 crore. Despite these positive earnings metrics, the market reaction remained negative, suggesting concerns beyond the headline numbers. Analysts attribute the fall in stock price to profit-booking, stretched valuations, and cautious investor sentiment in the non-banking financial services (NBFC) sector.
Market experts suggest that while earnings were strong, investors may be looking for even more aggressive growth trajectories or clarity on asset quality and loan book expansion, especially given the company’s new business announcements.
Strategic Acquisition in the Gold Loan Segment
In a key strategic move, L&T Finance announced its entry into the gold loan market, signaling a diversification push to boost its secured lending portfolio.
The company has entered into a business transfer agreement with Paul Merchants Finance Private Limited to acquire their gold loan business.
This acquisition is expected to accelerate L&T Finance’s gold loan operations by nearly 36 months, enabling quicker market penetration. Management highlighted that the acquisition offers a “high-quality, profitable gold loan franchise with an attractive return on assets (RoA) profile at a favorable valuation.”
Gold loans are seen as a low-risk, high-yield lending segment, and many NBFCs have been strengthening their presence in this space to ensure better asset quality and improved earnings predictability.
L&T Finance Stock Performance: A Mixed Bag
Despite Monday’s sharp fall, L&T Finance shares have delivered a robust 22% gain over the past year, significantly outperforming the Nifty50, which posted a modest 2.8% rise during the same period.
The company’s market capitalization currently stands at approximately ₹41,414.81 crore.
However, the recent stock volatility signals that investors are cautious, balancing optimism around growth initiatives with concerns about execution risks and the broader financial sector’s challenges.
L&T Finance Outlook
With a healthy earnings report and a strategic acquisition lined up, L&T Finance seems well-positioned for medium- to long-term growth. The expansion into the gold loan business is expected to enhance profitability and offer a diversified revenue stream.
Yet, in the near term, market sentiment could remain volatile as investors await more clarity on the integration process of the new gold loan business and its impact on overall financial performance.
For now, the company’s latest moves underline its commitment to building a strong, secured, and profitable lending portfolio in a competitive NBFC landscape.
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