L&T Finance: strong lending, shifting payments
Net profit rose 31% but a board-approved payments plan silently became a 3-4 year project, raising questions about guidance reliability.
The numbers
- Q1 consolidated net profit climbed 31% YoY to ₹915.99 cr on total income of ₹5,243.31 cr.
- Retail disbursements grew 36% YoY; personal loans surged 126% via digital partnerships.
- Credit costs improved 64 bps to 2.54%; book expanded 27% YoY to ₹1,29,634 cr.
Management's story
- Targets credit costs at 2-2.2% by Q4 FY27 and ROA at 2.8% by Q4 FY27.
- Deliberately walked away from ₹1,000-1,200 cr in potential disbursements to protect asset quality.
- Payments platform now a 3-4 year build focused on eliminating internal opex, not a Q2 FY27 launch for customer acquisition.
“Over the next couple of quarters, we will slowly start working on this business. Our first objective is to eliminate that Opex drag by doing it in-house.”
— Sudipta Roy, CEO, Jul 2026 call
Where they diverge
The payments platform story shifted entirely between April and July. In April, management promised a Q2 FY27 launch to acquire customers and diversify fee income. In July, it became a slow multi-year project to cut internal costs, with no explanation. The numbers confirm strong lending execution, but the reversal undermines management's forecasting credibility.
The full read
L&T Finance posted a record quarter: net profit up 31% to ₹915.99 cr, credit costs down, and retail disbursements up 36%. The core lending engine is executing well, with AI-driven underwriting improving asset quality. Management deliberately walked away from ₹1,000-1,200 cr in potential loans to maintain discipline. But the payments platform narrative took a puzzling turn. In April, a board-approved plan targeted Q2 FY27 launch for customer acquisition and fee revenue. In July, CEO Sudipta Roy described a slow start over 'a couple of quarters' with a 3-4 year build horizon, now aimed at eliminating internal opex. No explanation was given for the change. The lending business earns credit for prudence and performance. The payments reversal leaves a mark on management's commitment to strategic timelines.
What we're watching
- Whether management provides a timeline explanation for the payments pivot on the next call.
- Credit costs trajectory toward 2-2.2% by Q4 FY27.
- Cost of funds increasing 5-7 bps in FY27 to 7.35-7.4%.