• Credit-cost target: Credit costs declined from 2.64 in Q4 to 2.54 in Q1 and 2.46 in Q2, with roughly 10 basis points of reduction each quarter. Management remains committed to reaching 2 to 2.2% by Q4 FY27.
• Asset quality: Management said asset quality is stable across microfinance, two-wheelers, tractors and personal loans, with microfinance collection efficiencies at 99.8 to 99.7% and no current signs of stress. It has tightened underwriting guardrails and tempered rural distribution, prioritizing quality over volume.
• Loan growth: L&T Finance expects FY27 growth to be 20% plus, probably a little higher than 20%, while maintaining risk-calibrated lending. Management expects similar momentum in the festive quarter, particularly in urban segments, and expects Q3 tractor performance to improve from Q2.
• Gold-loan expansion: The gold-loan book is about ₹5,000 crore and is expected to reach about ₹8,000 crore by year-end; branches are planned to rise from 500+ to about 800 by year-end and eventually about 2,000. Management aims for gold loans to reach 14 to 15% of the overall loan distribution in 2 to 3 years; current average yield is about 19% and should improve as branches mature.
• Margins and returns: NIMs and fees were 10.47 last quarter and 10.48 this quarter, with guidance of 10 to 10.5%; management expects stability for the next 2 quarters, while noting possible later borrowing-cost pressure. Lower credit costs and expense control support its 2.8 to 3% ROA trajectory by Q4 FY27.