L&T Finance Holding (LTFH IN, mcap US$2.4bn, 3-mth ADV $3.6mn, UNRATED) - Ambit

A diversified shareholding pattern and a good corporate governance track record goes in favour of L&T Finance Holding. A diversified financial services business with some presence in rural and micro finance is an added advantage.

L&T Finance Holding has rallied over the past six months on anticipation of receiving a banking licence, and is currently trading at 2.2x FY14 P/B, which is expensive than any other bank (other than HDFC Bank, Kotak Mahindra Bank and IndusInd Bank) despite having no great past track record in a lending business to talk about.

We feel the risk reward equation is unattractive given that the anticipation of receiving the banking license is fully priced in the stock.

Source : Equity Bulls

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