L&T Finance (LTF) Q2 24/25 earnings summary

Executive summary

• Consolidated PAT for Q2 FY25 reached ₹696 crore, up 17% YoY, with retail disbursements growing 12% YoY to ₹15,092 crore and the retail book expanding 28% YoY to ₹88,975 crore; retailisation at 96% of the overall book.

• RoA held steady at 2.60%, up 18bps YoY, and NIMs improved by 32bps YoY to 8.94%.

• Transformation to a granular retail financial services provider continues, with a focus on customer acquisition, credit underwriting, digital architecture, and capability building.

• Collection efficiency in rural business finance remained robust at 99.45%; credit cost stable at 2.59% YoY.

• Consolidated net profit after tax for the six months ended September 30, 2024, was ₹1,381.93 crore, up from ₹1,124.74 crore year-over-year.

Financial highlights

• Consolidated book grew 18% YoY to ₹93,015 crore; on-book wholesale assets now form 4% of the total book.

• Retail disbursements rose 12% YoY to ₹15,092 crore; urban finance and SME finance led growth with 29% and 43% YoY increases, respectively.

• NIM plus fee stood at 10.86%, improving by 5 bps sequentially and 2 bps YoY.

• Consolidated ROA at 2.6% (up 18 bps YoY) and ROE at 11.65% (up 84 bps YoY).

• Consolidated revenue from operations for the quarter ended September 30, 2024, was ₹4,019.34 crore, up from ₹3,482.07 crore YoY.

Outlook and guidance

• On track to achieve Lakshya 2026 goals: >95% retailisation, >25% CAGR retail growth, GS3 <3%, NS3 <1%, and consolidated ROA of 2.8–3% by FY26.

• Q3 FY25 expected to be as challenging as Q2, with normalization anticipated in Q4 FY25.

• Cautious optimism for rural and urban demand recovery, supported by strong monsoon and government spending.

• Loan growth guidance remains at 25% as per Lakshya objectives, with risk-calibrated growth in non-rural segments.

• Continued focus on digital transformation, credit underwriting enhancements, and expanding customer acquisition channels.