L&T Finance Q4 FY26: Disbursements jump 62%, shares up 5%

Stock reaction after quarterly business update

Shares of L&T Finance climbed sharply on Monday, April 6, after the company shared its quarterly business update with exchanges. On the NSE, the stock rose as much as 5.53% to an intraday high of ₹253.65. On the BSE, it advanced as much as 5.64% to an intraday high of ₹254, amid a spike in trading activity. By 2:21 pm, the stock was trading 5.61% higher at ₹253.85, outperforming the NIFTY50, which was up nearly 1% at the time. The stock was also reported as the top gainer among futures and options shares during the session.

Q4 retail disbursements: the headline trigger

The key catalyst was a jump in retail disbursements in the March quarter (Q4 FY26). L&T Finance said retail disbursements surged 62% year-on-year to ₹24,080 crore in Q4 FY26 from ₹14,899 crore a year earlier. Separately, another disclosure in the same set of updates cited Q4 retail disbursements at a record ₹24,107 crore. Both figures point to the same underlying message: Q4 disbursement momentum strengthened materially versus last year.

The company also reported that it achieved its highest-ever annual retail disbursements in FY26. One set of numbers put FY26 retail disbursements at ₹83,190 crore, up 39% year-on-year. Another cited ₹83,213 crore for FY26, also up 39% year-on-year. The consistency across the updates was that retail disbursements set new records for both the quarter and the full year.

Segment-wise disbursement mix in Q4 FY26

L&T Finance’s quarterly update also broke out retail disbursements across major business lines for FY26. Rural business finance came in at ₹7,200 crore, up 41%. Farmer finance rose 16% to ₹2,035 crore. Urban finance increased 61% to ₹9,840 crore. SME finance was reported at ₹1,835 crore, up 20%.

The segmentation matters because it helps investors assess where growth is coming from and whether it is broad-based. In this case, the update pointed to strong growth in urban finance and a solid rise in rural business finance, alongside steady expansion in farmer and SME finance.

Profit and full financial results context

Alongside the operating update, Q4 FY26 results were described as strong. L&T Finance reported a 26.79% year-on-year rise in consolidated net profit to ₹806.63 crore in Q4 FY26, compared with ₹636.17 crore in Q4 FY25. The company’s profit performance was cited by analysts as a “PAT beat” in the context of market expectations.

A separate data point in the provided material also referenced a record annual profit after tax (PAT) of ₹2,644 crore, up 14% compared with the previous year. The same section noted the overall book size at ₹97,762 crore, up 14% year-on-year, and the retail book at ₹95,180 crore, up 19% year-on-year.

Borrowing cost: WACB hits a low

Another financial metric highlighted in the updates was borrowing cost. L&T Finance reported its lowest-ever weighted average cost of borrowing (WACB) of 7.17% for the quarter and 7.35% for the full year. For an NBFC, lower funding costs can support net interest margins and profitability, especially when disbursement volumes are expanding.

This metric was positioned as part of the company’s broader push to improve return ratios and strengthen the retail-focused model.

Management commentary: Lakshya 2031 and credit cost path

Speaking to NDTV Profit after the company’s fourth-quarter earnings, MD and CEO Sudipta Roy described “Lakshya 2031” as a plan with four measurable targets. The targets mentioned were 20%-plus CAGR book growth, credit costs below 2%, ROA of 3 to 3.2%, and ROE of 16 to 18%.

On operating momentum, Roy said he did not see disbursement momentum getting squeezed “as of now”, while also noting that energy markets could transmit costs later and lead to moderation. On credit costs, guidance mentioned was that by Q4 FY27 the company expects to be in a corridor of 2% to 2.2%, with a move below 2% expected after that, described as a FY28 to FY29 timeframe.

What analysts and brokerages are focusing on

Analysts broadly welcomed the combination of strong disbursement momentum and profit performance. At the same time, the “ROE gap versus 18% target” was flagged as a central concern that remains under watch. The update noted that most brokerages maintained BUY or ADD ratings, with target prices in the ₹200 to ₹225 range in the cited list.

Key numbers snapshot

The Q4 update combined stock moves, disbursement trends, profit growth, and funding cost improvements. The table below summarises the main reported datapoints.

Market impact and why it mattered

The immediate market impact was a sharp upward move in the stock price, supported by a quarterly update showing a large jump in retail disbursements. Investors generally track disbursements closely for lenders because they indicate demand, execution, and potential loan book growth, subject to credit quality. The update also provided evidence of momentum across multiple segments, including urban and rural finance.

Separately, the reported improvement in borrowing costs adds context to profit growth. Lower WACB can help profitability, but the broader debate raised by analysts is whether the company can lift ROE toward the targets described under Lakshya 2031. That focus is likely to keep attention on both growth and credit costs in coming quarters.

Conclusion

L&T Finance’s April 6 rally followed a Q4 FY26 update that highlighted record retail disbursements, a strong year-on-year jump in quarterly retail disbursals, and improved funding costs. Q4 FY26 consolidated net profit was reported higher year-on-year, adding to the positive read-through from disbursement numbers. Management has also laid out measurable targets under Lakshya 2031, including credit cost and return ratio goals. Investors will likely track whether the company meets its stated credit cost corridor of 2% to 2.2% by Q4 FY27, and how quickly ROE closes the gap to the longer-term target band.