DBT Bureau
Pune, 10 July 2026
The Board of L&T Finance announced the financial results for the first quarter ended June 30, 2026. Having successfully transitioned to an AI-enabled Retail lender under its Lakshya 2026 strategy, the Company as a part of its next 5-year strategic plan Lakshya 2031 is steadily working towards transitioning to an AI-native Retail financial services institution through cutting-edge in-house AI & Deep Tech stack. The Company offers Farmer Finance, Rural Business Finance, Two-wheeler Finance, Personal Loan, Home Loan and Loan Against Property (LAP), SME Finance, and Gold Finance. With a robust business model and super-fast solutions development cycle, LTF is dedicated towards building a high-quality risk calibrated retail lending franchise with equal dominance in urban and rural segments.
Key highlights for Q1FY27
Strong retail and consolidated book growth
- Strong start to Lakshya 2031 trajectory by registering a retail book growth of 28% YoY against a target of 20%+ YoY.
- Retail book for the quarter stood at ₹1,27,535 crore compared with ₹99,816 crore in Q1FY26.
- Consolidated book for Q1FY27 stood at ₹1,29,634 crore compared with ₹1,02,314 crore in Q1FY26, registering a growth of 27% YoY.
Margin and profitability improvement
- Stable NIMs + Fees for Q1FY27 at 10.47% versus 10.22% in Q1FY26, registering an improvement of 25 bps YoY.
- Return on Assets (RoA) improved to 2.48% in Q1FY27 from 2.37% in Q1FY26.
Healthy disbursement momentum and segment growth
- Robust business model coupled with responsible growth across all retail segments led to healthy quarterly retail disbursements in Q1FY27 at ₹23,852 crore versus ₹17,522 crore in Q1FY26, a growth of 36% YoY.
- Risk-calibrated growth across product segments with a focus on high-yielding secured and unsecured products.
Proactive asset liability management
- Diversified liability mix enabled the company to firmly anchor Q1FY27 Weighted Average Cost of Borrowing (WACB) at 7.20% compared with 7.68% in Q1FY26, down 48 bps YoY.
- This was achieved despite an uncertain and challenging external environment.
Steady improvement in consolidated asset quality
- Maintained an improving trajectory in consolidated asset quality, with Gross Stage 3 (GS3) at 2.86% and Net Stage 3 (NS3) at 0.90% for Q1FY27 versus GS3 of 3.31% and NS3 of 0.99% in Q1FY26.
- Gross Stage 3 (GS3) stood at 2.86% in Q1FY27 versus 3.31% in Q1FY26.
- Net Stage 3 (NS3) stood at 0.90% in Q1FY27 versus 0.99% in Q1FY26.
Improvement in credit cost
- Continuous focus on tightening credit and risk administration frameworks, strengthening collections infrastructure, and accelerating AI-led technology transformation led to an 89 bps YoY reduction in credit cost to 2.54% in Q1FY27 versus 3.43% in Q1FY26 (before macro prudential provisions).
- Credit cost for Q1FY27 stood at 2.54% compared with 2.64% in Q4FY26, a sequential reduction of 10 bps.
Performance for Q1FY27 (Consolidated)
- Profit after tax for Q1FY27 stands at Rs. 902 Crore vs. Rs. 701 Crore, up by 29% YoY
- Retail disbursements for Q1FY27 stands at Rs. 23,852 Crore vs. Rs. 17,522 Crore in Q1FY26, growth of 36% YoY
- Rural business finance disbursements continued to exhibit strong growth at 6,961 Crore in Q1, a growth of 24% YoY, while maintaining a strong 0DPD Collection efficiency of nearly 99.8%.
- Cyclops powered Two-Wheeler disbursements stood at Rs. 3,006 Crore vs. 2,128 Crore in Q1FY26, a growth of 41% YoY
- Personal Loans disbursements continued the growth momentum by registering a 126% jump in YoY disbursements to Rs. 4,380 Crore in Q1FY27, with an increased focus on risk calibrated disbursements through Big Tech Partnerships
- Continued the momentum in Gold Finance distribution expansion, exiting Q1FY27 with 343 branches, a cumulative addition of 213 new branches since acquisition of the business in June 2025. Book size of the Gold Loan business expanded to Rs. 3,829 Crore in Q1FY27 as against a book size of Rs. 1,360 Crore in Q1FY26, witnessing a growth of 182% YoY
- Consolidated Credit cost for Q1FY27 at 2.54% vs. 2.64% in Q4FY26, a reduction of 10 bps QoQ
- RoE increased to 12.71% in Q1FY27 from 10.86% (RoE after macro prudential provisions) in Q1FY26
- RoA stood at 2.48% in Q1FY27 vs. 2.37% in Q1FY26, up 11 bps YoY
Commenting on the financial results 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. Our consistent investments in technology, analytics and AI continue to be a key differentiator, both in terms of customer experience as well as credit outcomes. In our bid to transform into an AI-native organization, we are increasingly embedding our proprietary AI ecosystem across the entire lending stack from sourcing and underwriting through our in-house AI credit engine ‘Project Cyclops’ to portfolio monitoring through ‘Project Nostradamus’ and our expanding suite of in-house developed AI copilots and agents. These capabilities are enabling superior credit selection, improved customer experience, faster turnaround times and enhanced operating efficiencies, while strengthening the quality and sustainability of our growth.
The economy continues to exhibit resilience, supported by healthy government spending, improving infrastructure and sustained consumption trends. We are also pleased to note that our Rural Business Finance vertical has resumed its growth trajectory, with healthy business parameters across new customer acquisition, disbursement growth and collection efficiencies.
As we embark on the first full year of our Lakshya 31 journey, our focus remains on delivering consistent, profitable and high-quality growth. We will continue to invest in innovation, strengthen our distribution capabilities and enhance customer experience as we build a future-ready, AI-native financial institution that will be resilient across economic cycles.”
