L&T Finance Ltd — Q4 FY26 earnings call
Summary generated by AI from the official transcript L&T Finance Ltd filed with BSE on 05 May 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
L&T Finance reported its highest-ever annual profit after tax of ₹3,003 crore for FY26, up 14% YoY, with Q4FY26 PAT at ₹807 crore, up 27% YoY, driven by record retail disbursements of ₹24,107 crore in the quarter. Management outlined its new five-year Lakshya 2031 strategic plan targeting book growth CAGR of 20%+, credit costs of 2% or less, RoA of 3.0% to 3.2% and RoE of 16% to 18%, while also announcing a new payments platform. Management also discussed an annual ECL model refresh that released ₹301 crore of provisions carried as overlays and increased Stage 1 provisioning coverage from 0.52% to 0.80%.
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Numbers mentioned
Profit after tax: ₹3,003 Cr (FY26)
p. 4
“I am pleased to inform you that we have concluded FY26 with our highest ever annual profit after tax of ₹3,003 Cr, up by 14% YoY, before a one-time impact of Labor Code of ₹21 Cr post-tax in Q3FY26.”
Sudipta Roy, page 4 of the filed PDF · View the filing
Profit after tax: ₹807 Cr (Q4FY26)
p. 4
“Our quarterly profit after tax for Q4FY26 stands at ₹807 Cr, up 27% YoY.”
Sudipta Roy, page 4 of the filed PDF · View the filing
Retail disbursements: ₹24,107 Cr (Q4FY26)
p. 4
“This has been achieved on the back of highest-ever quarterly retail disbursements of ₹24,107 Cr, up 62% YoY, with contributions received from all our lines of business.”
Sudipta Roy, page 4 of the filed PDF · View the filing
Retail book: ₹1,19,508 Cr (FY26)
p. 4
“The Retail book now stands at ₹1,19,508 Cr, reflecting a growth of 26% YoY, while the overall book size reached ₹1,21,728 Cr in FY26 and a RoA of 2.4%, reflecting a growth of 18 basis points YoY in Q4FY26.”
Sudipta Roy, page 4 of the filed PDF · View the filing
NIMs+Fees: 10.47% (Q4FY26)
p. 8
“Consolidated NIMs+Fees for the quarter stood at 10.47% versus 10.15% for Q4FY25 and 10.41% for Q3FY26”
Sachinn Joshi, page 8 of the filed PDF · View the filing
Credit costs: 2.64% (Q4FY26)
p. 4
“I am pleased to inform that consequently, credit costs moderated to 2.64%, a 19-basis points reduction from the previous quarter.”
Sudipta Roy, page 4 of the filed PDF · View the filing
Consolidated RoE: 11.71% (Q4FY26)
p. 8
“Consolidated RoE stands at 11.71%, up 158 basis points YoY”
Sachinn Joshi, page 8 of the filed PDF · View the filing
ECL provisions released: ₹301 Cr (FY26)
p. 9
“This year's ECL model refresh has resulted in release of ECL provisions of ₹301 Cr.”
Sachinn Joshi, page 9 of the filed PDF · View the filing
Wholesale book: ₹2,220 Cr (FY26)
p. 8
“The wholesale book has been reduced from ₹2,582 Cr in FY25 to ₹2,220 Cr in FY26, a reduction of 14% YoY.”
Sudipta Roy, page 8 of the filed PDF · View the filing
Net security receipts book: ₹4,808 Cr (FY26)
p. 8
“The net security receipts book has also been reduced from ₹5,862 Cr in FY25 to ₹4,808 Cr in FY26, down 18% YoY, mainly due to monetization of assets driven by active stakeholder negotiation, completion of projects, and subsequent sale of constructed units and recovery measures implemented through legal action.”
Sudipta Roy, page 8 of the filed PDF · View the filing
Gold Finance closing book: ₹2,845 Cr (FY26)
p. 10
“The closing book reached ₹2,845 Cr at the end of the year, representing a significant growth of 63.7% QoQ.”
Sachinn Joshi, page 10 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
AUM growth — over 20% · FY27
stated conditionally by Sudipta Roy
p. 6
“As we enter FY27, the first year of our 5-year strategic plan Lakshya 2031, we expect the momentum gain in FY26 to sustain, with AUM growth of over 20% supported by robust consumer demand in urban finance, gold loans and our rural franchise, while maintaining a calibrated and quality-led approach to expansion.”
Sudipta Roy, page 6 of the filed PDF · View the filing
NIMs+Fees — 10% to 10.5% · FY27
stated firmly by Sudipta Roy
p. 6
“We expect our NIMs+Fees to remain stable in our guided range of 10% to 10.5%, while credit costs should trend lower in the range of 2% to 2.2% by Q4FY27 as newer portfolios season and our AI-led underwriting frameworks mature further.”
Sudipta Roy, page 6 of the filed PDF · View the filing
Credit costs — 2% to 2.2% · Q4FY27
stated firmly by Sudipta Roy
p. 6
“credit costs should trend lower in the range of 2% to 2.2% by Q4FY27 as newer portfolios season and our AI-led underwriting frameworks mature further.”
Sudipta Roy, page 6 of the filed PDF · View the filing
Return on Assets — at least 2.8% · Q4FY27
stated firmly by Sudipta Roy
p. 7
“As I mentioned earlier, by the last quarter of FY27, we are targeting to achieve a RoA of at least 2.8%.”
Sudipta Roy, page 7 of the filed PDF · View the filing
Book growth CAGR — 20%+ · Lakshya 2031 (5-year plan)
stated as an aspiration by Sudipta Roy
p. 6
“We will attempt a Book growth CAGR of 20%+ over the Lakshya period”
Sudipta Roy, page 6 of the filed PDF · View the filing
Credit costs — 2% or less · Lakshya 2031 (5-year plan)
stated as an aspiration by Sudipta Roy
p. 6
“We will endeavor to drive Credit Costs down to a level of 2% or less”
Sudipta Roy, page 6 of the filed PDF · View the filing
Return on Assets — 3.0% to 3.2% · Lakshya 2031 (5-year plan)
stated as an aspiration by Sudipta Roy
p. 6
“We will target to reach a Return on Assets in the range of 3.0% to 3.2%”
Sudipta Roy, page 6 of the filed PDF · View the filing
Return on Equity — 16% to 18% · Lakshya 2031 (5-year plan)
stated as an aspiration by Sudipta Roy
p. 6
“We will strive to deliver a Return on Equity in the range of 16% to 18%”
Sudipta Roy, page 6 of the filed PDF · View the filing
Payments platform launch — operationalize the platform · Q2 FY27
stated firmly by Sudipta Roy
p. 7
“The organization has already started laying the blueprint for the same and expects to operationalize the platform by Q2 FY27.”
Sudipta Roy, page 7 of the filed PDF · View the filing
Gold loan branch additions — 400+ new branches · FY27
stated firmly by Sudipta Roy
p. 8
“We intend to deploy 400+ new gold loan branches this year, of which at least 100 would be Sampoorna branches.”
Sudipta Roy, page 8 of the filed PDF · View the filing
Opex to book — 3.75% to 4% · Lakshya 2031 (5-year plan)
stated as an aspiration by Sachinn Joshi
p. 12
“In terms of the Lakshya 31, the opex to book range, I think we are looking at a range of 3.75% to 4% range, primarily keeping in mind the investments that will be required because over the next 5 years, there will be further investments in technology which will be required, investments in setting up”
Sachinn Joshi, page 12 of the filed PDF · View the filing
Credit cost — less than 2% · FY28
stated conditionally by Sudipta Roy
p. 22
“we are reasonably confident that, you know even within those see-saws etc in terms of environment, we are reasonably confident of reaching that less than 2% trajectory by FY28 as rightly pointed by you.”
Sudipta Roy, page 22 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said there is no visible worsening yet, though fertilizer supply for Kharif sowing and industrial gas supply are being watched, and it remains committed to the 20%+ growth guidance absent unseen shocks.
Answered by Sudipta Roy
Asked by Shreya Shivani: Whether the West Asia conflict poses risks to the SME, personal loan, or rural books, and whether the AUM guidance already factors these in.
p. 11
“As of now, we really do not see any significant worsening either of any or impact rising out of the West Asia crisis on any of our portfolios, whether it be SME or any other portfolio like Rural Business Finance vertical or Tractors or Two wheelers.”
Sudipta Roy, page 11 of the filed PDF · View the filing
Management clarified the ₹125 crore was a macro-prudential contingency now subsumed into Stage 1/2 provisioning, not lost, and it will continue to build such buffers going forward.
Answered by Sachinn Joshi
Asked by Kunal Shah: On the ECL model refresh and whether the ₹125 crore contingency buffer released was linked to PD/LGD or just contingency.
p. 12
“The requirement naturally increases because ECL model runs at a lag. We have actually this quarter come out of this whole challenge with March ending at 99.8% collection efficiency, right?”
Sachinn Joshi, page 12 of the filed PDF · View the filing
Management said fee income excludes MTM losses and reflects liquidity income dynamics, and that fee income should remain range-bound as part of the overall NIMs+Fees guidance.
Answered by Sachinn Joshi
Asked by Pranuj Shah: Why fee income growth appeared tepid relative to disbursement growth.
p. 13
“No, fee income does not include any MTM losses. Primarily there is an amount of liquidity income.”
Sachinn Joshi, page 13 of the filed PDF · View the filing
Management said GCC hiring is offsetting IT slack and expects only marginal impact, while confirming the opex plus credit cost corridor is expected to narrow from 6.5-7% historically to 5.75-6% during Lakshya.
Answered by Sudipta Roy
Asked by Avinash Singla: Whether AI-driven job market softness in IT/financials could hurt two-wheeler and personal loan growth, and whether opex efficiency will show up meaningfully over the Lakshya period.
p. 15
“So according to our assessment, we really do not expect the IT staffing or hiring industry to completely fall off a cliff, at least for the next 12 to 18 months.”
Sudipta Roy, page 15 of the filed PDF · View the filing
Management said SR-related gains are not factored into the RoE guidance and will instead be used to build further macro-prudential provisions as they materialize.
Answered by Sachinn Joshi
Asked by Chintan Shah: Whether the Lakshya 2031 RoE guidance factors in gains from resolution of the SR portfolio.
p. 16
“So, first thing is, we have not taken into account any gains coming out of SR portfolio because earlier we had guided that as and when such gains come in, we will actually utilize the, those credits to take care of the, further macro-prudential provisions to be created.”
Sachinn Joshi, page 16 of the filed PDF · View the filing
Management confirmed incremental Stage 1 provisioning will be at 80 basis points but said this does not change the FY27 credit cost outlook because slowing roll-forwards offset the higher day-one provisioning.
Answered by Sachinn Joshi
Asked by Anuj Singla: Whether the Stage 1 provisioning increase to 80 basis points reflects a permanent change in PD/LGD assumptions affecting FY27 credit cost outlook.
p. 20
“No. See, the reason for that is the, actual roll-forwards if they slow down, the hit to P&L is expected to come down significantly.”
Sachinn Joshi, page 20 of the filed PDF · View the filing
Management said credit cost improvement will be primarily driven by Cyclops-based customer selection, with confidence of reaching sub-2% credit cost sometime in FY28.
Answered by Sudipta Roy
Asked by Abhijit Tibrewal: Whether product mix change or full Cyclops maturation will play the bigger role in bringing credit costs below 2%.
p. 21
“Yes, so, see, one of the things which is there is that the impact on credit cost will be primarily driven by customer selection through Cyclops.”
Sudipta Roy, page 21 of the filed PDF · View the filing
Management declined to give business-wise credit cost estimates but pointed to the disclosed 30+ DPD data on the Cyclops two-wheeler portfolio and said personal loans should land in a 2% to 3% industry loss-rate corridor.
Answered by Sudipta Roy
Asked by Hardik Shah: What through-the-cycle credit cost assumptions underlie the move from 2.6% to sub-2% credit cost, especially for two-wheeler and personal loans.
p. 23
“See, we don't give business-wise credit cost estimates, we don't give out because, you know, this is like too dependent on market conditions, etc.”
Sudipta Roy, page 23 of the filed PDF · View the filing
Management said PCR levels have historically been conservative relative to the actual ECL-model requirement of 60-65%, and that the incremental reduction reflects overlay release rather than a fundamental change, though Cyclops-underwritten book quality should improve stage requirements over time.
Answered by Sachinn Joshi
Asked by Suraj Das: Whether declining Stage 2/3 PCR over recent years implies LGD assumptions are also coming down due to improving recoveries.
p. 27
“So, across the industry the actual, the money which is required as per the ECL model is in that range of about 60% to 65% and hence the incremental is nothing but the overlay.”
Sachinn Joshi, page 27 of the filed PDF · View the filing
Risks flagged
Spillovers from the West Asia conflict on the broader Indian economy
p. 4
“Against this broadly resilient backdrop, spillovers from the ongoing West Asia conflict pose potential downside risk.”
Sudipta Roy, page 4 of the filed PDF · View the filing
Potential fertilizer supply constriction ahead of Kharif sowing due to Middle East disruption
p. 11
“So, if the crisis does not resolve in time for the Kharif sowing season, then we might see some sort of constriction of supply, fertilizer availability there, which might have downward impact on yields on some of the agricultural produce later.”
Sudipta Roy, page 11 of the filed PDF · View the filing
Possible El Niño conditions affecting the monsoon season
p. 10
“As we go forward in FY27 with the backdrop of the West Asia geopolitical tensions and the possibility of El Niño conditions later during the monsoon season, we are hopeful that we can maintain the upward momentum in risk-calibrated growth and profitability in FY27 and beyond as we continue our journey of executing the Lakshya 2031 plan.”
Sudipta Roy, page 10 of the filed PDF · View the filing
Tightened supply of industrial gases impacting some SMEs
p. 11
“However, there are, there have been sort of tightened supply of industrial gases, etc. which has also impacted some of the SMEs.”
Sudipta Roy, page 11 of the filed PDF · View the filing
Unforeseen regulatory action such as the Karnataka microfinance ordinance disrupting business plans
p. 22
“The Karnataka microfinance industry ordinance issue came out of the blue, right, in the month of February last year, and it was nowhere factored into any of our plans, right, which delayed the recovery of the entire microfinance industry by almost six months.”
Sudipta Roy, page 22 of the filed PDF · View the filing
Continued drag on RoA from unresolved wholesale/security receipts portfolio
p. 17
“So, if you had to look at standalone basis, our retail portfolio is actually exhibiting RoAs at a level higher than our consolidated RoAs.”
Sudipta Roy, page 17 of the filed PDF · View the filing
Generated by claude-sonnet-5. Source: the transcript as filed with BSE. We link to the exchange's copy; we do not host transcripts. Parakho is a data and screening tool, not an investment adviser — nothing here is a recommendation to buy, sell or hold.