L&T Finance (LTF) Q3 25/26 earnings summary

Executive summary

• Achieved highest-ever quarterly core PAT of ₹760 crore, up 21% year-on-year before a one-time labor code impact; PAT after exceptional item at ₹739 crore, up 18% year-on-year.

• Retailisation reached 98% of the overall book, with the retail book at ₹1,11,990 crore, up 21% year-on-year; consolidated book at ₹1,14,285 crore.

• Retail disbursements for Q3FY26 were ₹22,701 crore, a 49% year-on-year increase, driven by strong festive demand and GST 2.0 implementation.

• Project Cyclops and other AI-driven initiatives advanced, with digital transformation and customer acquisition strategies showing strong results.

• Unaudited consolidated and standalone financial results for the quarter and nine months ended December 31, 2025, were approved and published, with statutory auditor review and no material misstatements reported.

Financial highlights

• Consolidated total income for the quarter was ₹4,581.49 crore, up from ₹4,335.79 crore in the previous quarter and ₹4,105.13 crore year-over-year.

• NIM plus fees improved to 10.41% in Q3FY26, up 19 bps quarter-on-quarter and 8 bps year-on-year, aided by yield and fee improvement and lower borrowing costs.

• Consolidated ROA after exceptional items at 2.31%, up 4 bps year-on-year; ROE at 11.07%, up 86 bps year-on-year.

• Credit cost moderated to 2.83% in Q3 FY26, down from 3.80% in Q4 FY25; excluding one-time co-borrower provision, core credit cost at 2.74%.

• Book value per share rose to ₹108.3, up 9% year-on-year; basic EPS was 2.9, up 17% year-on-year.

Outlook and guidance

• Confident of sustaining business momentum and asset quality improvements into FY27, targeting ROA of 2.8%-3% by Q4 FY27.

• Credit cost expected to reach 2%-2.2% by Q4 FY27, with further improvements as Cyclops underwritten portfolios season.

• NIM plus fee guidance maintained at 10%-10.5% corridor, with potential upside from further rate transmission and product mix.

• Secured-unsecured loan mix targeted at 60-40 over the next two to three years.

• Focus on continuous improvement in credit cost and asset quality, with digital and AI initiatives expected to further enhance performance.