L&T Finance shares rise 4% after Q1 earnings: should you buy?

L&T Finance's consolidated profit after tax (PAT) figure stood at ₹701 crore, up by 10 per cent from ₹636 crore reported in the previous quarter

L&T Finance share price today: Shares of the non-banking financial company (NBFC), L&T Finance, jumped over 4 per cent on Monday, July 21, 2025, hitting a 52-week high of ₹212.85. The buying interest on the counter came after the company released its earnings for the first quarter of financial year 2025-2026 (Q1FY26).

At 01:45 PM, shares of L&T Finance were trading at ₹210.85, up by 3.79 per cent on the National Stock Exchange. In comparison, NSE Nifty was comfortably trading above the key psychological level of 25,000, up by 76 points or 0.31 per cent. The total market capitalisation of the company stood at ₹52,664.25 crore.

 

L&T Finance-Q1FY26 earnings

The company's consolidated profit after tax (PAT) figure stood at ₹701 crore, up by 10 per cent from ₹636 crore reported in the previous quarter (Q4FY25). However, on a year-on-year (Y-o-Y) basis, the rise was limited to just 2 per cent. The book size of the NBFC rose to ₹1,02,314 crore, a 15 per cent rise from ₹88,717 crore reported in the corresponding quarter of the previous fiscal year (Q1FY25).

Meanwhile, L&T Finance's net interest margin (including fees) for the quarter under review stood at 10.22 per cent as against 11.08 per cent reported in Q1FY25. On the asset quality front, gross stage 3 assets (GS3) stood at 3.31 per cent in Q1FY26, a marginal rise from 3.14 per cent reported in the same period of the previous fiscal year.

"In a challenging quarter, our company remained focused on outcomes and achieved a resilient performance while showcasing our ability to manage market headwinds. This performance is on the back of our commitment to sourcing creditworthy customers backed by technology and robust credit guardrails, while keeping a strong focus on collection efficiency across businesses," said Sudipta Roy, managing director and CEO of L&T Finance.

Should you buy?

As per analysts, L&T Finance's stabilised asset quality despite a seasonally tough quarter was a positive indicator for the NBFC.  "Disbursements and loan growth remained modest, reflecting the company’s strategic focus on calibrated risk-based expansion. Notably, asset quality remained largely stable despite Q1FY26 being a seasonally weak quarter, which is a key positive. Additionally, the company benefited from a decline in borrowing costs, driven by policy rate cuts, which supported a modest expansion in NIMs," Motilal Oswal Financial Services stated in a report.

As for now, the brokerage firm has maintained a 'Buy' rating on the stock, which is set for revision post the earnings call.

JM Financial has also maintained a 'Buy' rating on the stock with the target price (TP) of ₹230. The brokerage, however, said it may review the share price target post the earnings call. "Though credit costs were anticipated to be elevated in H1FY26, we believe that the outcome during the quarter was favorable with GS3 holding up at 3.3 per cent (up 2 basis points quarter-on-quarter)," the brokerage firm said.