L&T Finance Ltd. (LTF) - Q1 FY27 Earnings Update

Executive Summary L&T Finance reported record consolidated net profits for Q1 FY27, driven by robust retail loan expansion, strong disbursements, and sequential improvements in asset quality. The outperformance prompted upward earnings revisions from global brokerages, leading to an intraday stock gain of up to 3.8%. Financial & Operational Highlights (Q1 FY27) Net Profit: Rose 28.7% YoY to ₹902 crore, exceeding consensus estimates (Nomura reported an 8% beat). Revenue & NII: Total revenue increased 25% YoY to ₹4,894.9 crore. Net Interest Income (NII) grew 28.4% YoY to ₹2,924.8 crore. Loan Book Expansion: The consolidated loan book reached a historic ₹1.29 lakh crore (+27% YoY), heavily anchored by a 28% YoY growth in the retail portfolio to ₹1.28 lakh crore. Retail disbursements grew 36% YoY to ₹23,852 crore. Asset Quality: Gross Stage 3 assets improved significantly, declining to 2.86% from 3.31% YoY. Gross Stage 2 and Stage 3 assets also showed sequential improvement. Brokerage Perspectives Nomura (Buy | Target: ₹370): Raised FY27–29 earnings estimates by 2–10%, citing strong underwriting performance in the two-wheeler segment driven by AI engines. Target implies a ~13% upside. Management Guidance & Strategic Outlook MD & CEO Sudipta Roy reiterated a long-term compound annual loan growth target of 20%+, with room for acceleration. The lender targets long-term credit costs at 2% under its Lakshya parameters. Furthermore, LTF is aggressively integrating AI into digital operations, projecting an opex reduction of 30–40 bps over the next 3–4 years. Sourcing momentum remains robust via digital partnerships with major fintech platforms including Google Pay, PhonePe, and CRED.