What Supported L&T Finance’s Profit Growth and Stable Margins in Q2 FY26?
L&T Finance delivered a consolidated net profit of ₹203 crore for Q2 FY26, reflecting a 32% year-on-year rise. Revenue stood at ₹2,727 crore, up 19% YoY, supported by a strong retail book and healthy disbursement momentum. The company’s focus on high-yield retail lending helped expand margins and sustain earnings growth.
Net interest margins (NIMs) improved to 8.42% from 8.24% QoQ, while return on assets (ROA) strengthened to 6.46%. Gross Stage 3 assets declined marginally to 3.29% from 3.31%, underscoring the lender’s improved credit management practices and digital underwriting efficiencies.
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The retail book expanded 5% quarter-on-quarter to ₹1.04 lakh crore, accounting for 97% of the total portfolio. The company’s overall AUM rose to ₹1.07 lakh crore. Retail disbursements jumped 8% QoQ to ₹18,883 crore, led by two-wheeler, micro-loan, and consumer finance segments.
Provisions declined 3% sequentially to ₹3,238 crore, indicating strong risk control. Credit cost stood at 2.41%, slightly higher than 2.23% in the previous quarter but well within the guided range. The company’s secured loan mix remained above 70%, providing stability to its balance sheet.
L&T Finance continues to optimise its funding profile through diversified borrowings and improved cost of funds. Management remains confident of achieving double-digit loan book growth while maintaining strong capital adequacy and stable credit costs through FY26.
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Analysts view L&T Finance as a stable performer in India’s NBFC landscape, with rising retail penetration and solid capital strength. The stock is expected to benefit from lower credit costs and improving macroeconomic conditions.
Investor Takeaway: Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that L&T Finance’s strong retail shift, improved NIMs, and disciplined asset quality management reflect a sustainable growth trajectory for FY26–FY27.
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SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment adviser before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
