L&T Finance reported a 5% QoQ and 6% YoY increase in consolidated PAT to ₹735 Cr in Q2FY26. The retail book crossed ₹1 lakh Cr, growing 18% YoY. Disbursements hit a record ₹18,896 Cr, up 25% YoY, driven by rural finance, two-wheeler loans, and personal loans. The company saw improved asset quality and aims for a 2% credit cost trajectory medium-term, with technology playing a key role.
Financial Performance Highlights
In Q2FY26, L&T Finance achieved notable financial milestones, demonstrating robust growth and strategic advancements:
- Consolidated Profit After Tax (PAT) reached ₹735 Cr, reflecting a growth of 5% quarter-over-quarter (QoQ) and 6% year-over-year (YoY).
- The retail book surpassed a significant milestone, exceeding ₹1 lakh Cr and reaching ₹1,04,607 Cr, which represents an 18% YoY increase. The total consolidated book size increased by 15% YoY, totaling ₹1,07,096 Cr.
- The company’s Return on Assets (RoA) stood at 2.41%.
Record Disbursements & Business Segment Growth
The company recorded its highest-ever quarterly disbursement at ₹18,896 Cr, marking a 25% YoY and 8% QoQ increase. Performance highlights across key business segments include:
- Rural Business Finance: Disbursements of ₹6,316 Cr, up 16% YoY and 12% QoQ.
- Two-Wheeler Finance: Registered a 18% QoQ disbursement growth.
- Personal Loans: Disbursements surged by 50% QoQ, driven by big tech partnerships. Total personal loan disbursments amounted to ₹2,918 Cr in Q2.
- Gold Loans: The business acquired significant momentum during the quarter outperforming expectations with a quarterly disbursement of ₹983 Cr.
Strategic Initiatives & Outlook
L&T Finance is focused on strengthening its technology infrastructure and credit underwriting processes to achieve sustainable growth. Key initiatives include:
- Project Cyclops: AI-powered digital underwriting engine now powering 100% of underwriting in Two-Wheeler, Farm Equipment, and SME businesses.
- Project Nostradamus: Automated real-time portfolio management engine, with beta testing underway.
- Lakshya 2026 Goals: The company aims to achieve retailization of >95% by FY26, with a current retailization of 98%.
L&T Finance expects credit costs to trend lower in the medium term, with a target of 2%. They have received a rating upgrade from S&P, enhancing their access to global capital markets.
Update on Five Pillars of Execution
The company is focused on five strategic pillars to drive growth and efficiency:
- Customer Acquisition
- Sharpening Credit Underwriting
- Futuristic Digital Architecture
- Brand Visibility
- Capability Building
Source: BSE