InvestorQ : What do you suggest I do with my holdings in L&T Finance and Ambuja Cements after the September quarter results? Should I hold or exit?
manisha Kolvenkar made post

What do you suggest I do with my holdings in L&T Finance and Ambuja Cements after the September quarter results? Should I hold or exit?

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Mahima Roy answered.
2 years ago
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Both the companies have been in the news in the last few months for different reasons. In fact, L&T Finance did see lot of value loss in recent past due to the concerns surrounding the NBFC space. Let me address the two companies separately.

L&T Finance Holdings is one of the leading NBFCs in India and it reported a 13% growth in total revenues at Rs.3712 crore for the September quarter. The top line growth was broadly in line considering the stress that the industry has been under. However, the net profit was down by 69% at Rs.174 crore. But this was more of a one-time hit of Rs.473 crore that the company had taken on its deferred tax write offs. L&T Finance has shifted to the lower tax bracket of 25.17% offered by the government and that would require a write-off for lower tax shields on deferred taxes. If that is removed then profits have actually shown growth. At the current price level, the downside risk on the stock is limited.

Ambuja Cements put up a better performance, largely along expected lines. Ambuja reported 35% growth in net profits at Rs.534 crore for the September quarter. This was largely driven by a sharp fall in logistics costs and a greater focus on premium product sales. Total income was almost flat at Rs.6190 crore for the September quarter. However, volumes did take a hit on flood related demand compression in Maharashtra, Bihar and parts of UP. However, since most cement stocks are fully priced, you don’t need to look at adding on to your positions at this point of time.

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