L&T Finance Limited has disclosed the receipt of an Environment Social Governance (ESG) score of 80 from a SEBI-registered ESG Rating Provider. The rating was assigned by ESG Risk Assessments and Insights Limited (ESGRisk.ai), operating under Category I of SEBI-registered ESG Rating Providers, on May 14, 2026 at 02:28 p.m. (IST). The disclosure has been made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ESG Rating Details

The company informed the stock exchanges of this development as part of its regulatory disclosure obligations. The ESG score has also been simultaneously published on the official website of ESGRisk.ai. The following table summarises the key details of the rating disclosure:

Regulatory Disclosure

The disclosure was filed with both the National Stock Exchange of India Limited and BSE Limited in compliance with applicable listing regulations. The communication was signed by Apurva Rathod, Company Secretary and Compliance Officer of L&T Finance Limited. The company has requested the exchanges to take the information on record.

L&T Finance Limited is registered with CIN: L67120MH2008PLC181833 and is headquartered at Brindavan, Plot No. 177, C.S.T Road, Kalina, Santacruz (East), Mumbai 400 098, Maharashtra, India.

L&T Finance concluded FY26 on a strong note, reporting its highest-ever annual profit after tax of ₹3,003 Cr, up 14% YoY, before accounting for a one-time Labor Code impact of ₹21 Cr post-tax recorded in Q3FY26. The company's Q4FY26 earnings call, held on April 27, 2026, saw Managing Director & CEO Sudipta Roy, CFO Sachinn Joshi, and COO Raju Dodti present a comprehensive update on quarterly and annual performance, the conclusion of the Lakshya 2026 strategic plan, and the launch of the new five-year Lakshya 2031 roadmap.

Q4FY26 and FY26 Financial Highlights

The company's quarterly and annual performance reflected broad-based momentum across retail businesses, with record disbursements and improving profitability metrics. The following table summarises the key financial indicators:

Total income grew 26% YoY and 4% QoQ in Q4FY26, with PPOP growth of 31% YoY. NIMs+Fees improved sequentially by 6 basis points to 10.47%, driven by yield optimisation, fee improvement, and efficient liability management. Credit costs moderated to 2.64%, a reduction of 19 basis points from the previous quarter.

Retail Business Performance

All retail segments contributed to the record disbursement momentum in Q4FY26 and FY26. The table below provides a segment-wise breakdown:

Personal Loans achieved its highest-ever quarterly disbursement of ₹3,786 Cr, up 98% YoY, attributed to the scale-up of digital channels. Gold Finance saw its closing book reach ₹2,845 Cr at year-end, representing a 63.7% QoQ growth, reflecting the rapid expansion of the gold loan distribution network. The Rural Business Finance book grew 6.3% QoQ and 17% YoY, supported by improved collection efficiencies, with collection efficiency restored to pre-crisis levels of 99.8%+.

Wholesale Book and Security Receipts Update

The company continued to reduce its wholesale and security receipts (SR) exposure during FY26. The wholesale book declined from ₹2,582 Cr in FY25 to ₹2,220 Cr in FY26, a reduction of 14% YoY. The net security receipts book decreased from ₹5,862 Cr in FY25 to ₹4,808 Cr in FY26, down 18% YoY, driven by monetisation of assets through active stakeholder negotiation, project completions, sale of constructed units, and legal recovery measures. Management noted that the SR portfolio carries a provision coverage of 64%, up from 59% previously, and that significant resolution of assets is expected over the next three to four years.

ECL Model Refresh and Provisioning

The company undertook its annual ECL model refresh in Q4FY26, recalibrating probability of default (PD) and loss given default (LGD) methodologies across stages. Key outcomes of the refresh included:

• Release of ECL provisions of ₹301 Cr from management overlays: ₹290 Cr from Stage 3 and ₹11 Cr from Stage 2
• Corresponding increase of ₹301 Cr in Stage 1 ECL provisioning
• Subsumption of ₹125 Cr of macro-prudential provisions within the ECL model
• Stage 1 provision coverage improved from 0.52% in Q3FY26 to 0.80% in Q4FY26
• Stage 2 PCR improved marginally from 23.23% in Q3FY26 to 23.59% in Q4FY26
• Stage 3 PCR moved from 73% to 68%

Management clarified that this exercise had no P&L impact and was aimed at strengthening the credit risk framework. The Stage 1 provision of 80 basis points will apply to incremental asset build-up going forward, with the next model refresh expected in September or March.

Lakshya 2026 Outcomes and Lakshya 2031 Goals

With the conclusion of the Lakshya 2026 strategic plan, management provided a final scorecard against its stated targets:

The RoA target was not fully achieved due to headwinds from the microfinance crisis, with management targeting achievement of the 2.8% RoA goal by the exit of Q4FY27. The Lakshya 2031 plan sets the following measurable goals:

• Book growth CAGR of 20%+
• Credit costs of 2% or less
• Return on Assets of 3.0%–3.2%
• Return on Equity of 16%–18%

For FY27, management guided AUM growth of over 20%, NIMs+Fees in the range of 10% to 10.5%, and credit costs trending to 2%–2.2% by Q4FY27. The opex-to-book range for the Lakshya 2031 period is guided at 3.75%–4%, factoring in continued investments in technology, branch expansion, and new business lines.

AI Initiatives and Operational Highlights

L&T Finance highlighted several AI-driven milestones during the quarter. Project Cyclops, the company's proprietary credit administration framework, is now live in Two-Wheeler, Farm, SME, and Personal Loans businesses, with planned extension to Home Loans and Rural Business Finance in FY27. Early performance data showed the Cyclops Two-Wheeler portfolio recording a 30+ DPD rate of 2.8% at 10 months, compared to an industry average of 7.1%, on an observation window book of approximately ₹3,250 Cr.

Project Nostradamus, the AI-driven automated real-time portfolio management engine, went fully live in the Two-Wheeler Finance business in November 2025 and is planned for implementation in Personal Loans in Q1FY27, Rural Business Finance in Q2FY27, and subsequently in SME and Farm businesses. Productivity improvements across business lines were also reported:

The company also announced the Board-approved setup of a payments platform, expected to be operationalised by Q2FY27, aimed at customer acquisition, fee revenue diversification, and transaction data capture for lending businesses. Gold loan branch expansion reached 330 branches live as of Q4FY26, with plans to deploy 400+ new gold loan branches in FY27, of which at least 100 will be integrated Sampoorna multi-product branches. A total of 8.3 lakh new customers were added in Q4FY26, the highest ever, bringing the overall customer franchise to approximately 2.8 crore unique customers at the end of FY26.