L&T Finance Released Q1 FY2025 Results: Expanded Market Penetration

L&T Finance Limited (LTF), a leading Indian NBFC, reported strong financial results for the first quarter of FY2025 (ending June 30, 2024). This performance highlights the company’s commitment to its “Lakshya 2026” strategy, which aims to transform LTF into a top-tier, digitally-driven, and customer-centric retail financier.

Extensive Network and Deep Market Penetration

LTF boasts a powerful distribution network, reaching approximately 2 lakh villages across India. This network comprises nearly 1,900 rural meeting centres/branches and over 150 urban branches. Additionally, LTF has established strong relationships with over 13,000 channels over the past decade.

This extensive presence, coupled with a 2.4 crore strong customer database, empowers LTF to drive targeted cross-selling and up-selling strategies. Notably, cross-selling and up-selling contributed a significant 36% of the company’s Q1 FY2025 disbursements by value and 46% by count, highlighting the effectiveness of this approach.

Segment-Specific Growth Drivers

Rural Business Finance

Disbursements in Q1 FY2025 surged 28% year-on-year (YoY) to ₹ 5,773 crore, while the book size reached ₹25,887 crore, reflecting a 31% YoY increase. This growth stems from LTF’s strategic focus on expanding geographically into new locations and vertically by increasing customer acquisition within existing areas.

Farmer Finance

Disbursements climbed 8% YoY to ₹1,903 crore in Q1 FY2025, with the book size reaching ₹14,204 crore (up 8% YoY). This growth is particularly remarkable considering the flat industry growth, showcasing LTF’s ability to maintain a steady disbursement pace.

Two-wheeler Finance

Disbursements in this segment saw a significant 52% YoY jump to ₹2,621 crore in Q1 FY2025, while the book size expanded by 31% YoY to ₹12,025 crore. This growth is attributed to the establishment of new dealership partnerships and a continued focus on financing prime customers. Additionally, LTF achieved a noteworthy 100% YoY growth in EV financing and witnessed strong demand for its Superbike segment offerings.

Personal Loans

Q1 FY2025 disbursements remained relatively stable at ₹1,178 crore, representing a 1% YoY increase. However, the book size climbed by 11% YoY to ₹6,667 crore. This growth can be attributed to LTF’s expansion of its network of DSA channels across various locations.

Housing Loans and Loans Against Property

Disbursements in this segment experienced a robust 73% YoY increase to ₹2,245 crore in Q1 FY2025, with the book size reaching ₹19,961 crore (up 42% YoY). This growth can be linked to LTF’s collaborative partnerships with leading developers across prime locations. Additionally, the launch of “The Complete Home Loan” offering in 11 locations further boosted lead generation and contributed to improved performance.

SME Finance

Disbursements in Q1 FY2025 grew by 61% YoY to ₹978 crore, with the book size witnessing a significant 151% YoY increase to ₹4,471 crore. This growth is attributed to LTF’s focus on establishing new channels and diversifying its existing sourcing funnel.

Commenting on the financial results, Mr. Sudipta Roy, Managing Director & CEO, LTF, said, “It is with great pleasure that I announce our Q1FY25 results. The results you see for the quarter reflect the success of our 5-pillar strategy. The focus is on enhancing customer acquisition through the creation of a robust funnel and contiguous products, sharpening credit underwriting through the deployment of our proprietary digital credit engine ‘Project Cyclops’, building a futuristic digital architecture to drive innovation, increasing brand visibility through amplified share of voice, and capability building through the recruitment and upskilling of tech talent, which is resulting in robust performance.”

He further added, “In our ongoing efforts to revolutionise the lending space, LTF has been prioritising customer-centricity and harnessing cutting-edge technology. A significant milestone in this journey was the deployment of ‘Project Cyclops’ during Q1FY25, which enables an in-depth assessment of a customer’s ability to service the loan availed by them. The innovative digital solution has been successfully rolled out in beta across 25 locations through a network of 200 selected dealers, offering Two-wheeler Loans.”

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.