L&T Finance Q3FY26: Highest Ever Core PAT at ₹760 Cr, Retail Disbursements Surge 49% YoY
L&T Finance reported Q3FY26 highest ever core PAT of ₹760 Cr (up 21% YoY) and retail disbursements at ₹22,701 Cr (up 49% YoY). Retail book grew 21% YoY to ₹1,11,990 Cr. NIMs+Fees improved to 10.41%. Credit costs moderated to 2.83%. Gold loan disbursements surged 43% QoQ. Company aims for 2-2.2% credit cost by Q4FY27.
The announcement details robust financial performance with record profits and strong growth metrics across key business segments. The positive outlook and strategic initiatives like digital transformation and credit cost reduction indicate a significant positive impact on the company's future prospects.
The company reported strong financial results, including the highest ever quarterly core PAT, significant growth in retail disbursements and book size, and improved NIMs and credit cost trajectory. Positive outlook and progress on digital initiatives also contribute to the positive sentiment.
L&T Finance Limited (LTF) announced its Q3FY2025-26 financial results, reporting the highest ever quarterly core Profit After Tax (PAT) of ₹760 crore, an increase of 21% year-on-year (YoY). Even after accounting for a one-time exceptional impact of ₹29 crore related to the New Labour Code, the PAT stood at ₹739 crore, up 18% YoY. This strong profitability was driven by a record quarterly retail disbursement of ₹22,701 crore, a 49% YoY increase. Consequently, the retail book grew to ₹1,11,990 crore, reflecting a 21% YoY growth.
The company also reported a 18% YoY growth in total income and an 8.4% growth on a quarter-on-quarter (QoQ) basis. Operating costs increased by only 7% YoY, leading to a 25% growth in Profit Before Provisions and Contingencies (PPOP). Net Interest Margins (NIMs) plus Fees improved by 19 basis points (bps) QoQ to 10.41%, attributed to a focus on yield and fee improvement, alongside efficient liability management.
L&T Finance highlighted the return of its Rural Business Finance (RBF) vertical to a near-normal credit cost trajectory, with no utilization of macro-prudential provisions this quarter. The credit cost moderated to 2.83% in Q3FY26 from 2.98% in Q2FY26, a reduction of 15 bps QoQ. Excluding a one-time charge of ₹23 crore on certain co-borrower provisions, the core credit cost was 2.74%, a 24 bps reduction QoQ. The company aims to achieve a guided credit cost corridor of 2-2.2% by Q4FY27.
Significant progress was noted in the Gold Loan business, with quarterly disbursements of ₹1,408 crore, up 43% QoQ. The company plans to establish a distribution strength of over 330 gold loan branches by the end of FY26. Digital initiatives like Project Cyclops and Project Nostradamus are showing positive results, with Project Cyclops showing green shoots in Farm and SME businesses and Project Nostradamus delivering actionable insights for portfolio management. AI initiatives, Project Helios and Project Orion, are also being implemented to enhance decision-making and portfolio monitoring.
Against its Lakshya 2026 goals, L&T Finance maintained a Retailisation of 98%, achieved a Retail book CAGR growth of 28% between FY22-FY25, and reported a Q3FY26 RoA of 2.31% (2.37% before exceptional items), working towards a target of 2.8%-3.0% RoA by Q4FY27.
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