Stock Pick From Finance And Construction Sector

Considering latest quarterly result, L&T Finance Holdings’ NII increased by 16 per cent to Rs 278 crore in Q2FY17 as compared to same period in the previous financial year. The company’s NIM remained at 12.47 per cent in Q2FY17. Its PAT increased by 33 per cent to Rs 216 crore in Q2FY17 on a yearly basis. L&T Finance Holdings’ ROE expanded by 188 basis points to 11.72 per cent in Q2FY17 as compared to the same period of the previous fiscal year.  On the asset quality front, the company’s gross NPA contracted by 40 basis points to 5.1 per cent in Q2FY17 as compared to the same period of the previous financial year. Its net NPA also contracted by 98 basis points to 3.07 per cent in Q3FY17 on yearly basis. L&T Finance Holdings’ cost to income ratio has improved to 28 per cent in Q2FY17 from 33 per cent in Q2FY16.  The company’s Loans and advances in focused business grew by 24 per cent vs. 31 per cent decline in the de-focused business in Q2FY17. The company’s overall growth in loans & advances stood at 18 per cent in Q2FY17 on a yearly basis.

Welspun Enterprises offers civil engineering services. The company has achieved India's first financial closure for a hybrid annuity model project. It has developed and now operates public private partnership (PPP) projects in various sectors, such as roads, water and urban infrastructure. On financial front, Welspun Enterprises' revenue increased by 49.17 per cent to Rs 31.13 crore in Q1FY17 as compared to the same period in the previous financial year. The company posted negative EBITDA of Rs 8.46 crore in Q1FY17 against negative EBITDA of Rs 4.5 crore in Q1FY16. Its net profit declined by 27.9 per cent to Rs 5.71 crore in Q1FY17 on yearly basis. On segmental revenue front, Welspun Enterprises earned 53.49 per cent from infrastructure, 46.51 per cent from trading in Q1FY17. Welspun Enterprises has signed share purchase agreement (SPA) for divestment of Welspun Renewables Energy (WREPL).  WREPL has largest operating solar portfolio in India across 10 states. The transaction concluded during September 2016.