Earnings call transcript: L&T Finance posts record Q2 FY27 profit as shares slip

L&T Finance announced record Q2 FY27 profit and improved financial metrics in its earnings call transcript. The company reported a consolidated profit after tax (PAT) of INR 975 crores, a 33% increase from the previous year. Return on assets rose to 2.60%, while return on equity increased to 13.56%. Credit cost eased to 2.46%, with net interest margin plus fees remaining steady at 10.48%.

Management expressed confidence in meeting medium-term targets, such as return on assets between 2.8% and 3% by Q4 FY27, and long-term ROA goals of 3% to 3.2% by FY31. The company's retail book grew 29% year-on-year to INR 1,34,600 crores, while consolidated book increased 28% to INR 1,36,635 crores. Retail disbursements rose 27% year-on-year to INR 24,027 crores, supported by a larger customer base of 3 crore people and a wider branch network.

L&T Finance attributed its strong performance to technology-led underwriting, disciplined collections, and a diversified product mix. Despite the record profit and improved metrics, the stock price fell 2.5% to $255.45 from the previous close of $262, reflecting market caution due to potential concerns about borrowing costs, monsoon-related risks, and growth in certain segments.