L&T Finance Limited reported robust financial performance for Q3FY26, with consolidated profit after tax rising 17.9% year-on-year to ₹738.60 crores from ₹626.40 crores in the corresponding quarter of the previous year. However, the strong results were overshadowed by asset quality concerns highlighted by IIFL analysts, who noted significant disappointment on asset quality metrics.

Strong Financial Performance

The company delivered impressive growth across key financial metrics during the quarter. Net interest income grew 13.4% to ₹2,537.00 crores from ₹2,237.00 crores in the year-ago period, reflecting sustained momentum across its retail lending portfolio.

Asset Quality Concerns Emerge

Despite the strong financial performance, IIFL analysts expressed major disappointment regarding the company's asset quality metrics. According to IIFL's analysis, L&T Finance's reported credit costs rose by approximately 45 basis points quarter-on-quarter to 2.9%. The brokerage firm noted that "buffers cease, reality hits," indicating concerns about the sustainability of the current asset quality trends.

Retail Business Expansion

L&T Finance demonstrated exceptional growth in its retail segment, with disbursements for Q3FY26 reaching ₹22,690.00 crores, marking a sharp 49% increase from ₹15,210.00 crores in the year-ago quarter. The growth was broad-based across rural, urban, small and medium enterprise, and farmer finance segments.

The retail loan book expanded to ₹1,11,000.00 crores as of December 31, 2025, registering a year-on-year growth of around 21% from ₹92,224.00 crores. Retailisation remained strong at 97% during the quarter, broadly in line with last year, underscoring the lender's continued pivot away from wholesale exposures.

Nine-Month Performance and Strategic Initiatives

For the nine months ended December 31, 2025, L&T Finance maintained its growth trajectory with consolidated profit after tax of ₹2,173.71 crores, representing an 8.3% increase from ₹2,007.58 crores in the corresponding period. During the current financial year, L&T Finance acquired the gold loan business of Paul Merchants Finance Private Limited for approximately ₹711.00 crores through a slump sale on a going concern basis. Shares of L&T Finance closed marginally higher at ₹296.25, up 0.15%, ahead of the earnings announcement made after market hours.

L&T Finance Limited announced strong financial performance for the quarter and nine months ended December 31, 2025, demonstrating robust growth across key metrics. The non-banking financial company reported significant improvements in profitability and operational efficiency, with book size expanding to ₹16,671 crores during the reporting period.

Strong Quarterly Performance

The company delivered impressive results for Q3FY26, with consolidated net profit attributable to owners increasing substantially compared to the previous year. Revenue from operations also showed healthy growth, reflecting the company's expanding business operations.

Business Growth and Book Size Expansion

L&T Finance demonstrated strong business expansion with its book size growing to ₹16,671 crores, marking an 11% year-over-year increase and 5% quarter-over-quarter growth. The company benefited from positive GST collections and favorable monsoon conditions that boosted festival demand across its key business segments.

Nine-Month Financial Highlights

For the nine months ended December 31, 2025, L&T Finance maintained its growth trajectory with consistent performance improvements across all major financial parameters.

Exceptional Items Impact

The company reported exceptional items of ₹28.51 crores during the quarter and nine months ended December 31, 2025, related to the implementation of new labour codes. The Government of India consolidated 29 existing labour regulations into four Labour codes effective November 21, 2025, resulting in a one-time material increase in provision for employee benefits. The net impact after tax was ₹21.33 crores.

Earnings Per Share Performance

L&T Finance demonstrated strong earnings per share growth during the reporting period:

Business Expansion and Strategic Initiatives

During the reporting period, L&T Finance strengthened its market position through strategic acquisitions. On June 9, 2025, the company acquired the gold loan business of Paul Merchants Finance Private Limited for a total consideration of approximately ₹711 crores through a slump sale on a going concern basis. The company also continued its employee stock option programs, allotting 27,57,685 equity shares during Q3FY26 and 77,59,525 equity shares for the nine months ended December 31, 2025.