L&T Finance (LTF IN) (Buy) - Impressive start to the year

研报英文原文证据摘录

L&T Finance (LTF IN) (Buy) - Impressive start to the year

Global Markets Research

L&T Finance LTFL.NS LTF IN 13 July 2026

EQUITY: FINANCIALS

RatingImpressive start to the year Remains Buy

Target priceWe lift FY27-29F EPS estimates by 2-10%; maintain Buy but Increased from INR 370highlight risks from monsoon and insurance regulation INR 340

1QFY27 net profit beat our estimate by 8%; asset-quality trends encouraging Closing10 July 2026price INR 321

• LTF reported 1QFY27 net profit of INR9.03bn, beating our estimate by 8% and consensus

Implied upside estimate by 3%. Fig.8 Notably, the company beat to our credit cost estimate by 10%. +15.3%

• Overall/retail loan book grew by 27%/26% y-y, supported by strong 36% y-y growth in Market Cap (USD mn) 8,444.6

disbursements. Personal loans and two-wheeler disbursements (18% and 13% of the mix ADT (USD mn) 19.0

in 1QFY27) led the growth at 126% y-y and 41% y-y, respectively. Fig.10

Relative performance chart

Encouraging asset-quality trends, especially 2W segment with AI engines in place

• LTF's overall gross stage 2+3 (%) has seen another 10bp q-q improvement and is now at

4.1%. Net slippages as a percentage of opening loans (annualized) was at 1.8%, making it

the fifth quarter since 1QFY23 when this ratio remained under 2%.

• The two-wheeler book is now underwritten entirely by its AI engine. Thus, the healthy

improvement in delinquency trends in 1QFY27 vs pre-AI era is even more encouraging.

Risks – Monsoon and upcoming insurance distribution reform

• Farm equipment, rural group loans, micro finance and micro LAP (loan against property)

formed about 39% of LTF’s loan book (as of 1QFY27). Delayed monsoon or other

challenges can cause stress in this book, making this a key risk for LTF in FY27F.

Source: LSEG, Nomura