L&T Finance FY27: ICICI Sec lifts target to Rs 370

What changed for L&T Finance this quarter

L&T Finance drew fresh attention after ICICI Securities upgraded the stock to BUY from Add and raised its target price to Rs 370 from Rs 315. The brokerage note, dated July 12, 2026, followed a better-than-anticipated Q1 FY27 performance. The company’s quarterly update also came with detailed operating data on growth across retail segments, profitability ratios, and asset-quality indicators. Separately, the company has scheduled key events for the next reporting cycle, including an October 15, 2026 board meeting to approve Q2 and H1 FY27 unaudited results.

ICICI Securities upgrade: BUY from Add, target raised

In its July 12, 2026 results update, ICICI Securities cited Q1 FY27 performance as the trigger for its rating upgrade. The brokerage also raised its earnings expectations, increasing FY27E EPS by 2% and FY28E EPS by 4%. The target price revision to Rs 370 (from Rs 315) reflects the improved earnings outlook embedded in its updated estimates. While the note was a broker action, the underlying change was linked to operating performance and profitability metrics reported for the quarter.

Q1 FY27 profit and income: PAT and NII rose strongly

L&T Finance reported consolidated Q1 FY27 PAT of Rs 9,025 million, which converts to Rs 902.5 crore (normalized). The company reported PAT growth of 12% quarter-on-quarter (QoQ) and 29% year-on-year (YoY). Net interest income (NII) rose to Rs 32,429 million, or Rs 3,242.9 crore, up 24% YoY and 7% QoQ.

Alongside these figures, the investor feed also references net profit of Rs 915 and a Q1 summary that cites PAT of Rs 915.99 crore. Since both figures are present in the provided data, they are best read as different representations of the same quarter’s profitability, with minor variation due to rounding, reporting format, or the source’s display unit.

AUM and retail mix: book growth remained broad-based

The company’s reported Total AUM stood at Rs 12,96,340 million, which normalizes to Rs 129,634 crore. It grew 6% QoQ and 27% YoY. Retail AUM was Rs 12,75,360 million, or Rs 127,536 crore, showing 7% QoQ and 28% YoY growth.

The data also pointed to a high retail mix, with an investor feed indicating retailisation at 99% and a retail loan book of about Rs 1,34,500 crore (described as an estimate in the feed). The quarter’s reported AUM and retail AUM values show that growth continued to be led by retail products.

Retail disbursements: strong YoY growth, slight QoQ dip

Retail disbursements in Q1 FY27 were reported at Rs 2,38,520 million, which converts to Rs 23,852 crore. The company reported 36% YoY growth in retail disbursements, while they were down 1% QoQ. This mix of strong annual growth and a marginal sequential decline helps explain why broker commentary focused on the overall strength of the quarter while still tracking near-term momentum.

Product-wise growth: gold loans led sequential gains

Management data indicated that growth was broad-based during the quarter, with multiple product lines expanding sequentially. Gold loans grew 35% QoQ, making it the fastest-growing segment on a quarter-on-quarter basis. Urban finance grew 8%, rural business finance rose 5%, SME finance was up 4%, and farmer finance increased 3%.

This spread suggests that the quarter’s expansion was not dependent on a single product and aligns with the rise in total and retail AUM reported for the period.

Profitability and efficiency: operating metrics improved

L&T Finance reported that NIM plus fee income to assets was stable sequentially at 10.47%. Operating efficiency improved, with operating expenditure to assets declining by more than 10 basis points QoQ to 4.03%. As a result, pre-provision operating profit (PPOP) to assets expanded by 9 basis points to 6.43%.

Returns also moved up sequentially. Return on assets (RoA) improved by 8 basis points QoQ to 2.48%, and return on equity (RoE) increased by 100 basis points to 12.71%. These ratios are central to how brokers translate quarterly execution into forward earnings assumptions, particularly for an NBFC with a largely retail book.

Asset quality: Stage-3 ratios and credit cost moderated

The quarter showed continued improvement in asset quality. Gross Stage-3 declined 2 basis points sequentially to 2.86%. Net Stage-3 fell 6 basis points to 0.90%. Credit costs also eased, with credit cost down 10 basis points QoQ to 2.54%.

These movements matter because they influence provisioning requirements and the sustainability of profitability. The combination of improving Stage-3 ratios and lower credit cost was part of the broader Q1 picture that supported the upward revision in estimates by ICICI Securities.

Key dates: Q1 result date, investor meet intimation, and Q2 board meeting

The data set lists Q1 FY26-27 earnings date as July 10, 2026. It also notes that L&T Finance planned to discuss Q1 FY27 performance and strategy on a conference call on July 13, 2026 at 11:00 am IST.

For the next results cycle, L&T Finance has communicated that its Board of Directors meeting is scheduled on October 15, 2026 to consider and approve unaudited financial results (standalone and consolidated) for the quarter and half year ended September 30, 2026. The disclosure was filed with BSE and NSE on October 1, 2026. The company also issued an intimation for an investor meet for Q2 FY2026-27 financial performance and strategy update.

Key numbers snapshot (normalized to Rs crore)

What investors will track ahead of October 15

With the October 15, 2026 board meeting set to approve Q2 and H1 FY27 results, the next update will provide clarity on whether the Q1 trends continue. Investors are likely to focus on the pace of retail disbursements after the 1% QoQ dip reported in Q1, even as YoY growth remained strong. Another key monitorable is whether the company sustains operating discipline, given that operating expenditure to assets improved to 4.03% in Q1.

Asset-quality direction will remain important, particularly whether Stage-3 ratios and credit cost continue to trend down from Q1 levels of 2.86% gross Stage-3, 0.90% net Stage-3, and 2.54% credit cost. For broker models, the persistence of these indicators often influences whether earnings upgrades are maintained in subsequent quarters.

Conclusion

ICICI Securities’ upgrade of L&T Finance to BUY and its higher Rs 370 target followed a Q1 FY27 quarter marked by stronger profitability, improving asset quality, and broad-based retail growth. The next major checkpoint is October 15, 2026, when the board is scheduled to approve unaudited Q2 and H1 FY27 results for the period ended September 30, 2026, alongside related investor communication on performance and strategy.