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Informist, Thursday, Jan. 15, 2026

By Kabir Sharma

MUMBAI – L&T Finance Holdings Ltd. is expected to report a steady performance in the December quarter, supported by healthy retail loan growth and stable asset quality, though margin expansion and profit growth are likely to remain subdued, according to brokerage estimates.

The non-banking finance company's consolidated net profit for the December quarter is estimated at INR 7.7 billion, up 23% on year, according to an average of estimates from seven brokerages. For the September quarter, the company had reported a consolidated net profit of INR 7.4 billion and in the year-ago quarter, the company had reported a bottom line of INR 6.3 billion. The company's net interest income for the December quarter is seen rising 12% on year to INR 25 billion.

L&T Finance had previously said that it wants to be a more retail focussed lender and brokerages expect the strategy to continue in the December quarter. Assets under management are seen rising 18–20% year on year, led by two-wheeler finance, farm equipment loans, and urban finance segments such as housing and loan against property.

In a note, JM Financial said that L&T Finance's retail portfolio now accounts for more than 95% of the total AUM, reducing volatility in asset quality and earnings. Strong festival demand and pickup in rural spending following a favourable monsoon are also expected to have supported disbursements during the December quarter.

Margins are expected to remain largely stable sequentially with some benefit from lower funding costs following recent policy rate cuts. Brokerages noted that while competition has kept lending yields under pressure, easing cost of funds and better access to bank borrowings should help offset the impact. In the September quarter, the lender's net interest margin improved to 8.20% from 8.24% in the trailing quarter.

The company's asset quality is expected to remain broadly stable, with no major deterioration anticipated in the December quarter. Analysts expect gross non-performing assets to remain range-bound, supported by improved collection efficiency and tighter underwriting standards. Credit costs are likely to stay high compared with larger peers, brokerages said.

The NBFC's gross stage-3 asset ratio was 3.29% as at September-end, down 2 basis points on quarter. Net stage-III asset ratio stood at 1.00%, against 0.99% as on Jun. 30.

Brokerages said stress in unsecured and micro loan segments, which had weighed on the sector earlier, has shown signs of easing, supported by better rural cash flows and higher recovery rates. Seasonal pressures in some portfolios remain a concern but are not expected to materially impact earnings.

Operating expenses, however, continue to be an area of focus. Analysts expect costs to remain high as the company continues to invest in technology, analytics, and branch expansion to support growth. While operating leverage is improving gradually, higher expenses are expected to limit gains.

Return on assets is expected to remain in the 2.3–2.5% range, according to brokerage estimates, reflecting stable margins and controlled credit costs.

Analysts said investors will closely track AUM growth trends, credit costs, margin sustainability, and operating expense discipline, along with management commentary on growth guidance and outlook on asset quality for rest of the year.

On Wednesday, shares of the lender ended 2.5% higher at INR 295.80 on the National Stock Exchange. The non-bank finance company will declare its earnings on Friday.

Following are the December quarter earnings estimates of L&T Finance from seven brokerages in descending order of the estimate of net profit in INR billion:

End

Edited by Ashish Shirke

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