• Record quarterly retail disbursements of INR 24,107 crores in Q4 FY26, up 62% YoY from INR 14,899 crores in Q4 FY25
• Retail book reached INR 119,508 crores, reflecting 26% YoY growth; overall book size reached INR 121,728 crores, up 25% YoY
• ROA improved to 2.4% in Q4 FY26, up 18 basis points YoY; targeting 2.8% ROA by Q4 FY27
• Credit costs moderated to 2.64%, down 19 basis points QoQ; targeting 2-2.2% range by Q4 FY27
• NIM plus fees increased to 10.47%, up 6 basis points sequentially and 32 basis points YoY
• Cyclops AI underwriting engine outperformed industry significantly - 30+ DPD at 2.8% vs industry 7.1% for two-wheeler portfolio after 10 months
• Gold loan business grew 63% QoQ to INR 2,845 crores with 330 branches live; planning to add 400+ new gold loan branches in FY27
• Board approved setup of payments platform to launch by Q2 FY27 for customer acquisition and fee diversification

L&T Finance delivered a strong FY26 performance with highest-ever annual PAT of INR 3,003 crores (up 14% YoY) and quarterly PAT of INR 807 crores (up 27% YoY), driven by record quarterly retail disbursements of INR 24,107 crores (up 62% YoY). Management launched ambitious Lakshya 2031 strategic plan targeting 20%+ book CAGR, ROA of 3-3.2%, ROE of 16-18%, and credit costs below 2%, supported by AI-driven underwriting (Cyclops) and expansion into payments business.

L&T Finance reported consolidated PAT of INR 807 crores for Q4 FY26, up 27% YoY, and annual PAT of INR 2,981 crores (INR 3,003 crores excluding one-time labor code impact of INR 21 crores), up 13-14% YoY. Total income grew 26% YoY and 4% QoQ with PPOP growth of 31% YoY. NIMs plus fees improved to 10.47% from 10.15% in Q4 FY25 and 10.41% in Q3 FY26. The retail book grew to INR 119,508 crores (26% YoY) while consolidated book reached INR 121,728 crores (25% YoY). Annual retail disbursements hit record INR 83,013 crores, up 39% YoY. ROA improved to 2.4% (up 18 bps YoY) and ROE to 11.71% (up 158 bps YoY). The wholesale book reduced 14% to INR 2,220 crores and security receipts book declined 18% to INR 4,808 crores. Credit costs moderated to 2.64% from 2.83% in previous quarter. Stage 1 provision coverage improved from 0.52% to 0.8%, while stage 3 PCR reduced from 73% to 68% following ECL model refresh.

Management displayed strong confidence, emphasizing their position as India's leading AI-enabled NBFC and highlighting measurable benefits from Cyclops implementation across businesses. CEO Sudipta Roy repeatedly stressed the organization's commitment to 'risk-first, tech-first' approach and prime customer focus, noting 90%+ of March 2026 two-wheeler disbursements were in prime segment. The tone was decidedly optimistic about FY27 outlook despite acknowledging geopolitical uncertainties from West Asia conflict. Management emphasized their AI leadership through concrete metrics - productivity improvements ranging from 11% to 66% across businesses, with field officer productivity in MFI up 38% YoY. They demonstrated conviction in the Lakshya 2031 targets, particularly the ambitious goal of sub-2% credit costs, based on early Cyclops performance data. The launch of payments platform signals strategic ambition beyond traditional lending. Management repeatedly highlighted their proactive approach to portfolio management through AI tools like Nostradamus for real-time risk monitoring.

The primary external headwind is the ongoing West Asia geopolitical crisis and potential oil price shocks that could impact consumer demand and SME operations. Management noted concerns about fertilizer supply disruptions affecting the upcoming sowing season, which could impact agricultural yields and their farm finance business. While currently seeing no visible impact, they remain cautious about potential energy shocks and inflation. Internal challenges include the need for continued heavy investment in technology and branch expansion (1,500-2,000 new branches planned) which will pressure operating expenses. The microfinance sector faced disruption from Karnataka ordinance in FY26 which delayed recovery by six months. Competition in the personal loans and housing finance segments is intensifying, with home loans facing yield pressure in the reducing interest rate environment. The company carries legacy wholesale exposure of INR 2,220 crores and SR book of INR 4,808 crores which creates ROA drag and will take 3-4 years to fully resolve. Management acknowledged that IT sector job losses (though offset by GCC growth) and potential AI-driven employment disruption could impact their salaried customer base for personal loans and two-wheelers.

Revenue Outlook: 20%+ AUM growth CAGR targeted for Lakshya 2031 period (FY27-FY31); Over 20% AUM growth expected in FY27

Margin Outlook: NIM plus fees to remain stable in 10-10.5% range; OpEx to book ratio of 3.75-4% for Lakshya 2031 period

Key Targets:

• ROA of 2.8% by Q4 FY27, targeting 3-3.2% range by FY31
• ROE of 16-18% by FY31
• Credit costs of 2-2.2% by Q4 FY27, trending below 2% during Lakshya 2031
• Stage 3 assets below 3% and Net Stage 3 below 1%
• Deploy 400+ gold loan branches in FY27 (100 as Sampoorna multi-product branches)
• Add 150-200 microfinance branches and 150-200 micro-LAP branches in FY27
• Launch payments platform by Q2 FY27

The Q&A session focused heavily on three themes: (1) validation of the ambitious Lakshya 2031 targets, particularly the sub-2% credit cost goal and 3-3.2% ROA target, (2) understanding the ECL model refresh mechanics and implications for future provisioning, and (3) assessing risks from geopolitical tensions and AI-driven job market changes. Analysts were particularly interested in how management reconciles aggressive growth targets with improving asset quality, given the company's historical challenges. Management responded confidently with extensive data on Cyclops performance, showing concrete outperformance vs industry benchmarks. Multiple questions probed the sustainability of margin expansion and cost efficiency gains from AI investments. Management emphasized their AI leadership through specific productivity metrics and portfolio performance data. Analysts sought clarity on whether current strong credit metrics (slippages down to 402 crores, improving collection efficiency) are sustainable or cyclically strong. Management's responses were data-driven and detailed, demonstrating operational command. Concerns about payments business strategy and co-lending opportunities were addressed but not deeply explored. Overall, analysts appeared cautiously optimistic but wanted reassurance on execution capability for the ambitious five-year plan, particularly given the delayed achievement of Lakshya 2026 ROA targets due to microfinance disruption.