L&T Finance

Retail loan book up 18%

L&T Finance has recorded 2% growth in net profit to Rs 701.10 crore in the quarter ended June 2025 (Q1FY2026). The consolidated income from operations increased 13% to Rs 3914.50 crore for the quarter ended March 2025, while other income of the company rose 4% to Rs 345.10 crore. The total income increased 13% to Rs 4259.60 crore for Q1FY2026.

Interest expenses increased 21% to Rs 1635.74 crore. Operating expenses increased 8% to Rs 1007.91 crore, allowing the operating profits to improve 8% at Rs 1615.95 crore. The cost-to-income ratio was steady at 38.4% in Q1FY2026 from 38.5% in Q1FY2025. Depreciation jumped 43% to Rs 40.69 crore, while provisions increased 16% to Rs 632.04 crore.

Profit before tax rose 2% yoy basis at Rs 943.22 crore. Effective tax rate was flat at 25.7% in Q1FY2026 from 25.7% in Q1FY2025. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 2% to Rs 701.10 crore for Q1FY2026.

The company has maintained strong momentum in the retail franchise with a retail book rising at steady pace of 18% to Rs 99816 crore. The retail disbursements of the company increased at healthy pace of 17% to Rs 17522 crore in Q1FY2026. This is led by Farmer Finance, Home Loan & Loan Against Property (LAP), and Gold Loans in the secured assets space while unsecured asset growth was contributed by Personal Loans

Gross Stage 3 assets of the company rose slightly to 3.31% end March 2025 from 3.29% a quarter ago and 3.14% a year ago, while the Net State 3 assets rose slightly to 0.99% from 0.97% a quarter ago and rose from 0.79% a year ago. The provision coverage ratio was flat at 71% from a quarter ago. Credit cost eased to 2.23% in Q1FY2026 from 2.54% in Q4FY25 and 2.37% for Q1FY25.

Retailisation has increased to 98% of overall book from 97% in the previous quarter and 95% a year ago. Retail book at Rs 99816 crore, recorded growth of 18% YoY. Consolidated book crossed Rs 1 lakh crore at Rs 102314 crore, posting growth of 15% YoY.

Net Interest Margin + Fees & Other Income improved to 10.22% from 10.15% in Q4FY25. The quarterly Weighted Average Cost of Borrowing (WACB) reduced by 16 bps (QoQ) to 7.68% in Q1FY26 through diversified liability mix.

RoA improved to 2.37% from 2.22% in the previous quarter. RoE rose to 10.86% in Q1FY2026 from 10.13% in the previous quarter.

Debut Investment Grade Credit Rating assigned to L&T Finance Limited (LTF) by International Rating Agencies (S&P Global Ratings and Fitch Ratings). S&P Global Ratings has assigned LTF ?BBB-? long-term and ?A-3? short-term issuer credit rating. ? Fitch Ratings has assigned LTF long-term foreign and local currency Issuer Default Ratings (IDR) of ?BBB-? with a Stable outlook

Book value per share of the company stood at Rs 102.4 per share at end June 2025. Adjusted book value (net of NNPA) per share of the company stood at Rs 98.5 per share at end June 2025.

Business Highlights:

The Company?s granular and deep pan-India Retail franchise is led by its strong distribution capabilities namely, its geographic presence in around 2 Lakh villages from around 2,089 rural meeting centers/branches and 407 branches across urban centers. This extensive geographic presence is also supported by over 13,000 distribution points built over a decade. The Company also leverages over 2.6 Crore of its customer database to drive a credible cross-sell and up-sell franchise contributing 35% of the Company?s repeat disbursements share in value and 49% in count during Q1FY26.

Rural Business Finance: Q1FY26 disbursements at Rs 5618 Crore as against Rs 5773 Crore, down 3% YoY. Book size at Rs 26616 Crore as against Rs 25887 Crore, up 3% YoY

Farmer Finance: Q1FY26 disbursements at Rs 2200 Crore as against Rs 1903 Crore, up 16% YoY. Book size at Rs 15756 Crore as against Rs 14204 Crore, up 11% YoY

Two-wheeler Finance: Q1FY26 disbursements at Rs 2128 Crore as against Rs 2621 Crore, down 19% YoY. Book size at Rs 12331 Crore as against Rs 12025 Crore, up 3% YoY

Personal Loans: Q1FY26 disbursements at Rs 1942 Crore as against Rs 1178 Crore, up 65% YoY. Book size at Rs 9383 Crore as against Rs 6667 Crore, up 41% YoY

Housing Loans and Loans Against Property: Q1FY26 disbursements at Rs 2780 Crore as against Rs 2245 Crore, up 24% YoY. Book size at Rs 26464 Crore as against Rs 19961 Crore, up 33% YoY

SME Finance: Q1FY26 disbursements at Rs 1273 Crore as against Rs 978 Crore, up 30% YoY. Book size at Rs 6964 Crore as against Rs 4471 Crore, up 56% YoY.

Commenting on the financial results, Sudipta Roy, Managing Director & CEO, LTF said, ?In a challenging quarter, our Company remained focused on outcomes and achieved a resilient performance while showcasing our ability to manage market headwinds. This performance is on the back of our commitment to sourcing creditworthy customers backed by technology and robust credit guardrails, while keeping a strong focus on collection efficiency across businesses. Our impetus remains on risk calibrated business growth with a sharp focus on a strong asset quality, laying the foundation for a sustainable and predictable growth going forward.

In the quarter, we achieved the highest-ever consolidated book of over Rs 1 Lakh Crore milestone and added a secured high yield product to our loan portfolio i.e., Gold Loan. Our company has been assigned a debut investment grade credit rating of ?BBB-/Positive? by S&P Global Ratings and ?BBB-/Stable? by Fitch Ratings. This rating will serve as a foundation for further diversifying our liability franchise by accessing financing opportunities across the global capital markets. Our AI-driven nextgen digital credit engine, ?Project Cyclops? is starting to yield early dividends in our Two-wheeler finance business, and during the quarter, ?Project Cyclops? was scaled up in Farm business and launched in the SME finance business. We remain focused on continuously strengthening our risk and credit frameworks, which will serve us well in times to come.?

Financial Performance FY2025

L&T Finance has recorded 14% jump in net profit to Rs 2643.66 crore in the half year ended March 2025 (FY2025). The consolidated income from operations increased 14% to Rs 14663.29 crore for the year ended March 2023, while other income of the company jumped 12% to Rs 1277.69 crore. The total income increased 13% to Rs 15940.98 crore for FY2025. Interest expenses increased 12% to Rs 5996.76 crore. Operating expenses increased 13% to Rs 3845.67 crore, allowing the operating profits to improve 15% at Rs 6098.55 crore. The cost-to-income ratio was steady at 38.7% in FY2025 from 39.1% in FY2024. Depreciation declined 21% to Rs 138.90 crore, while provisions fell 16% to Rs 2468.39 crore. Profit before tax surged 15% yoy basis at Rs 3491.26 crore. There is exceptional income of Rs 0 crore Effective tax rate increased to 24.3% in FY2025 from 23.5% in FY2024. Net Profit of the company, after share in profit of associates and non-controlling interest, improved 14% to Rs 2643.66 crore for FY2025.

Net Interest Margin + Fees & Other Income was at 10.59% from 10.67%. the company recorded highest ever annual Return on Assets (RoA) of 2.44% from 2.32%, up 12 bps YoY. Return on Equity (RoE) stood at 10.87% against 10.35%, up 52 bps YoY.

Credit cost for FY25 stood at 2.50% vs 2.67% for FY24 (Credit Cost for FY24 was arrived at after additional prudential provision on Security Receipts of Rs 175 crore). Credit cost for FY25 arrived at after utilizing macroprudential provisions to the extent of Rs 400 crore.

L&T Finance: Consolidated Results
Particulars	2506 (3)	2406 (3)	Var %	2503 (12)	2403 (12)	Var %
Income from operations	3914.50	3452.62	13	14663.29	12913.93	14
Other Income	345.10	331.99	4	1277.69	1137.12	12
Total Income	4259.60	3784.61	13	15940.98	14051.05	13
Interest Expended	1635.74	1351.41	21	5996.76	5377.19	12
Operating Expense	1007.91	937.17	8	3845.67	3393.10	13
Operating Profits	1615.95	1496.03	8	6098.55	5280.76	15
Depreciation / Amortization	40.69	28.44	43	138.90	114.77	21
Provisions and Write-offs	632.04	545.32	16	2468.39	2136.96	16
Profit before EO	943.22	922.27	2	3491.26	3029.03	15
Exceptional Item	0	0	-	0	0	-
PBT after EO	943.22	922.27	2	3491.26	3029.03	15
Tax Expense	242.38	237.02	2	847.84	711.90	19
Net Profit for the period	700.84	685.25	2	2643.42	2317.13	14
Share in profit/(loss) of associate company	0.00	0.00	-	0.00	0.00	-
Profit attributable to non-controlling interest	-0.26	-0.26	0	-0.24	-2.97	-92
PAT	701.10	685.51	2	2643.66	2320.10	14
EPS* (Rs)	11.2	11.0		10.6	9.3
Equity	2497.7	2489.8		2494.9	2488.9
Adj BV (Rs)	98.5	91.6		98.7	91.5
* EPS and Adj BV are calculated on diluted equity as given for each year after EO and relevant tax. Face Value: Rs 10, Figures in Rs crore
PL: Profit to Loss, LP: Loss to Profit
Source: Capitaline Corporate Database

 

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