Hinduja Leyland Finance Unlisted Share

✔ Vehicle Financing (Flagship Business Line)

Financing for commercial vehicles, tractors, two-wheelers, and construction machinery, supported by strong OEM partnerships including Ashok Leyland.

✔ Loan Against Property (LAP)

Secured credit for self-employed and small entrepreneurs leveraging real estate collateral.

✔ Housing Finance

Through its subsidiary, Hinduja Housing Finance, the company offers affordable housing loans in semi-urban and rural India.

✔ Portfolio Buyouts

Strategic acquisition of high-quality loan pools to accelerate AUM expansion.

This lending mix ensures high asset-backed exposure, minimized credit risk, and recurring revenue growth.

What the Company Does – Customer-Centric Lending at Scale

HLF serves a broad borrower base through customized financial offerings such as:

• Commercial and passenger vehicle loans
• Finance for small business owners and first-time borrowers
• Affordable housing loans
• Two-wheeler finance aimed at middle-income households

A strong connection with India’s automotive ecosystem and deep penetration into Tier-2 and Tier-3 regions has positioned HLF as a preferred lending partner for retail customers and transport entrepreneurs.

Financial Performance – Strong Growth Momentum (FY23 vs FY24)

HLF has delivered consistent growth across revenue, profitability, and asset quality:

📌 Key Metrics

• Total Income: ₹3,502 Cr → ₹4,660 Cr (+33%)
• PAT: ₹490 Cr → ₹636 Cr (+30%)
• AUM: ₹36,906 Cr → ₹49,235 Cr (+33%)
• EPS: ₹9.15 → ₹11.89 (Value accretive growth)

📌 Asset Quality Improvement

• Gross Stage III: 3.34% → 2.7%
• Provision Coverage: 117% → 201% (Significant strengthening)

📌 Capital Strength

• Capital Adequacy Ratio (CAR): 17.26% (above RBI norms)

This robust financial trajectory highlights HLF’s operational discipline and efficient scale-up strategy.

Valuation – Attractive Entry Point for Long-Term Investors

At a valuation of ₹270 per share, HLF demonstrates strong value indicators:

• P/E Ratio: 22x (well below peers like Capri Global & Poonawalla Fincorp)
• P/B Ratio: 2x (reasonable relative to asset base)
• Market Cap / Topline: 2.8x (scope for significant expansion)
• Price-to-AUM: 0.28x (deep value compared to industry benchmarks)

With rising profitability and an AUM nearing ₹50,000 Cr, the company appears undervalued and positioned for medium-term re-rating.

Key Risks to Consider

While HLF showcases strong fundamentals, investors must assess the following risks:

1️⃣ Credit Risk

Exposure to economically sensitive automotive and housing sectors.

2️⃣ Interest Rate Risk

Higher borrowing costs may compress margins.

3️⃣ Regulatory Compliance

RBI’s stringent NBFC norms require robust governance and capital management.

4️⃣ Competitive Pressure

Challenging landscape with players like Bajaj Finance and Poonawalla Fincorp.

5️⃣ Operational & IT Risks

High reliance on digital infrastructure increases cybersecurity exposure.

6️⃣ Regional Concentration

Vehicle portfolio is skewed toward selective geographies.

Conclusion

Hinduja Leyland Finance stands out as a high-quality NBFC combining steady AUM growth, improving asset quality, and an attractive valuation. Backed by the Hinduja Group’s credibility and a strong automotive ecosystem, HLF offers a compelling investment opportunity—particularly for investors seeking long-term value in India’s fast-expanding retail lending market.