Highlights
- L&T Finance reported its highest-ever quarterly PAT of INR 902 crore.
- Consolidated loan book increased 27% YoY to INR 1,29,634 crore.
- Retail disbursements rose 36% YoY to INR 23,852 crore during Q1 FY27.
L&T Finance Ltd. (NSE:LTF) reported its highest-ever consolidated Profit After Tax (PAT) of INR 902 crore for the quarter ended June 30, 2026, representing a 29% year-on-year increase from INR 701 crore reported in the corresponding quarter last year. The company also recorded its highest-ever consolidated loan book at INR 1,29,634 crore, up 27% from INR 1,02,314 crore in Q1 FY26.
Retail lending continued to drive growth, with the retail loan book expanding 28% year-on-year to INR 1,27,535 crore from INR 99,816 crore. Retail disbursements during the quarter stood at INR 23,852 crore, compared with INR 17,522 crore in Q1 FY26, reflecting growth of 36% year-on-year.
Source: Analysis by Kalkine
Asset Quality and Profitability Show Improvement
The company reported improvement in key asset quality indicators during the quarter. Gross Stage 3 (GS3) assets declined to 2.86% from 3.31% a year earlier, while Net Stage 3 (NS3) improved to 0.90% from 0.99%.
Net Interest Margin (NIM) plus fees improved to 10.47% in Q1 FY27 from 10.22% in the year-ago quarter. Return on Assets (RoA) increased to 2.48% compared with 2.37% in Q1 FY26, while Return on Equity (RoE) rose to 12.71% from 10.86%.
Credit cost also declined to 2.54% during the quarter from 3.43% in Q1 FY26 before macro prudential provisions and was lower than 2.64% reported in the previous quarter.
Lower Borrowing Cost Supports Margins
L&T Finance said its diversified liability mix helped reduce the weighted average cost of borrowing (WACB) to 7.20% in Q1 FY27 from 7.68% a year earlier, a decline of 48 basis points despite a challenging external environment.
The company stated that disciplined asset-liability management and diversified funding sources supported this improvement.
Business Segments Register Broad-Based Growth
Growth during the quarter was reported across multiple lending businesses.
Rural Business Finance book increased 22% year-on-year to INR 32,493 crore, while quarterly disbursements rose 24% to INR 6,961 crore.
Farmer Finance book expanded 11% to INR 17,514 crore, supported by quarterly disbursements of INR 2,453 crore.
Two-wheeler Finance book grew 22% to INR 15,068 crore, while disbursements increased 41% year-on-year to INR 3,006 crore.
Personal Loans recorded one of the highest growth rates, with the loan book rising 80% to INR 16,917 crore and quarterly disbursements increasing 126% to INR 4,380 crore.
Housing Loans and Loan Against Property (LAP) book increased 20% to INR 31,630 crore, while SME Finance book grew 28% to INR 8,884 crore.
Gold Finance also continued expanding following the business acquisition completed in June 2025. The Gold Loan portfolio reached INR 3,829 crore compared with INR 1,360 crore a year earlier, representing 182% year-on-year growth. The company exited the quarter with 343 Gold Finance branches after adding 213 branches since the acquisition.
AI Strategy Continues Across Lending Operations
L&T Finance said it is progressing towards becoming an AI-native retail financial services institution under its Lakshya 2031 strategy.
During the quarter, the company continued deploying in-house artificial intelligence tools across lending operations, including Project Cyclops for credit underwriting, Project Nostradamus for portfolio monitoring, Project Helios for SME underwriting and Project Canyon for Gold Loan origination.
The company also stated that its customer-facing PLANET application crossed 2.5 crore downloads as of June 30, 2026. According to LTF, the platform has processed collections exceeding INR 11,500 crore, serviced more than 14 crore customer requests and sourced loans worth around INR 34,462 crore.
Management Commentary
Commenting on the results, Mr. Sudipta Roy, Managing Director & CEO, LTF, said:
"Q1FY27 was another quarter where we remained focused on disciplined execution amidst an evolving macroeconomic environment marked by geopolitical uncertainties, inflationary pressures and elevated borrowing costs. Despite these external factors, our diversified retail franchise continued to demonstrate resilience, delivering strong business momentum and healthy book growth in line with the goals of our Lakshya 31 strategic plan."
He added that the company would continue investing in innovation, expanding distribution capabilities and enhancing customer experience as it progresses towards becoming an AI-native financial institution.
Key Risks
- Asset quality may be affected by changes in economic conditions.
- Credit demand could fluctuate across retail lending segments.
- Borrowing costs remain sensitive to interest rate movements.
- Regulatory changes may affect NBFC lending operations.
Summary
L&T Finance reported record quarterly earnings for Q1 FY27 with consolidated PAT of INR 902 crore, supported by growth in retail lending, improved asset quality and lower borrowing costs. The company also expanded lending across business segments while continuing deployment of AI-based technologies under its Lakshya 2031 strategy.
FAQs
Q: What was L&T Finance's Profit After Tax in Q1 FY27?
A: L&T Finance reported its highest-ever consolidated quarterly PAT of INR 902 crore, up 29% year-on-year.
Q: How much did L&T Finance's retail disbursements increase?
A: Retail disbursements rose 36% year-on-year to INR 23,852 crore during the first quarter of FY27.
Q: How did L&T Finance's asset quality change in Q1 FY27?
A: Gross Stage 3 declined to 2.86% while Net Stage 3 improved to 0.90% compared with the previous year.