L&T Finance (LTF) Q1 24/25 earnings summary

Executive summary

• Achieved highest-ever quarterly consolidated PAT of INR 686 crore (₹685.25 crore), up 29% year-on-year, driven by strong retail disbursement growth and robust execution of the five-pillar strategy.

• Retail book grew 31% year-on-year to INR 84,444 crore, with retailisation reaching 95% of the overall book.

• Consolidated book grew 13% year-on-year to INR 88,717 crore, marking a return to double-digit growth.

• Unaudited consolidated and standalone financial results for the quarter ended June 30, 2024, were reviewed and approved by the Board and auditors, with unmodified opinions issued.

• Launched beta version of next-gen credit underwriting engine 'Cyclops' and reimagined Home Loan offering.

Financial highlights

• Net interest margin plus fee rose to 11.08% from 9.64% year-on-year, aided by portfolio mix and stable borrowing costs.

• Consolidated ROA improved to 2.68% (up 55 bps year-on-year), and ROE to 11.58% (up 186 bps year-on-year).

• Consolidated total income for Q1 FY25 was ₹3,784.61 crore, up from ₹3,376.78 crore in Q1 FY24.

• Provision coverage ratio increased to 75% from 71% year-on-year.

• Cost-to-income ratio for the quarter was about 40%, with ongoing cost control initiatives.

Outlook and guidance

• Targeting over 95% retailisation and over 25% CAGR retail growth by FY26.

• Asset quality goals: GS3 below 3%, NS3 below 1%, and consolidated RoA between 2.8%-3% by FY26.

• Confident of maintaining growth momentum in retail and secured businesses, with calibrated approach in personal loans.

• Expect continued robust demand in home loans, LAP, and two-wheelers, supported by positive macro trends and monsoon outlook.

• Committed to keeping credit cost plus OpEx at about 7% of income.