L&T Finance reports record retail loan disbursements but faces profit decline due to asset quality issues

L&T Finance reported record retail loan disbursements of ₹15,210 crore in the third quarter, a 5% increase from last year. However, asset quality issues in rural and microfinance sectors impacted profitability, with profit falling 2% year-on-year. The company's gross stage 3 assets ratio worsened to 3.23% from 3.19% in the previous quarter. Provisions for rural loans were utilized to address credit costs, which rose to 2.91% before provisions, compared to 2.59% last quarter. L&T Finance is tightening its loan processes to improve asset quality, targeting a gross stage 3 assets ratio below 3% by FY26. The company aims for a 25% annual growth rate and a return on assets of 2.8-3% by FY26.