L&T Finance: record ₹902 cr profit at 2.8 times book

L&T Finance Limited (NSE: LTF) posted its highest ever quarterly profit of ₹902 crore in Q1 FY27, up 29%. The loan book grew 27% to ₹1,29,634 crore. What happened Retail disbursements rose 36% to ₹23,852 crore. The retail book grew 28% to ₹1,27,535 crore and is now 98% of all lending. Return on assets improved to 2.48% and return on equity to 12.71%, from 10.86%. Gross Stage 3 assets fell to 2.86% from 3.31%. Net interest margin plus fees stood at 10.47%. Why it matters This is real growth, not an accounting recovery. Disbursements, book and profit are all rising together. Within that, personal loan disbursements jumped 126% to ₹4,380 crore and the gold loan book grew 182% to ₹3,829 crore. My view Look at where the growth is coming from. A margin plus fee yield of 10.47% is not earned on tractor loans alone. It comes from personal loans, gold and two wheelers. Those products pay well while the cycle is kind, and they are also the first to crack when rural cash flows tighten. The bad loans from a book that grew 126% do not appear in the same year they were written. Now the price. At ₹309, the stock trades at about 2.8 times book and 24 times earnings, with return on equity still at 12.7%. You are paying a premium multiple for a return that is not yet premium. The gap closes only if return on equity moves towards 15%, which is what the Lakshya 2031 plan targets. What I am watching Q2 FY27 results, due in October, credit costs in personal loans and gold, and return on equity crossing 13.5%. On the chart, ₹338 is the 52-week high and ₹280 is the first support. My stance: Hold. Accumulate near ₹280. The growth is real, the price assumes it stays clean. Disclosure: I do not hold a position in L&T Finance Limited at the time of writing. This is not investment advice.