L&T Finance is betting on two-wheeler, personal and gold loans to drive growth in H2FY26, backed by GST-led demand and expansion in the branch footprint. In an interview with Kshipra Petkar, MD & CEO Sudipta Roy tells about the company’s digital push, asset quality strategy, and the road map to becoming a fully retail-focused lender within the next three quarters. Excerpts:
Which are the top three segments to fuel growth in H2?
The GST 2.0 reforms unleased a lot of pent-up demand, so we are likely to see growth in two-wheeler, personal loan and gold loan segments. We do believe that there is a good opportunity to grow the microfinance disbursements in a risk-calibrated fashion. If there are good amount of launches post Diwali, we can see some buoyancy in the housing segment.
How do you see growth in the gold loan segment?
The demand is very good. Disbursements via all the 130 branches have grown. We plan to open 200 branches before the year-end. I expect this business to show a very good momentum in terms of disbursements for the rest of the year.
In which areas are these branches being set up?
Initially, we will focus on West Bengal, Orissa, Punjab, Haryana, Rajasthan, Gujarat and MP. Karnataka is the only southern state as of now where branches will be opened. Out of 200 branches, around 50 will be Sampoorna branches, which will offer products other than gold loan.
In the investor presentation, you have attributed the growth in personal loan segment to big tech partnerships. How do you see this book growing?
I believe a growth upwards of 30-40% is possible in this business for the remaining part of the year. We will be adding a couple of new partners as well in H2.
Is L&T Finance of the view that digital partnerships are the way to grow?
For us, these channels offer the least friction and the lowest cost scale-up for customer acquisition. So, we are strongly focusing on this. Currently, we do personal loans, but over a period of time, you will see this digital partnership being extended to other lines of products such as two-wheeler and home loans. Some of these products will probably see the light of the in the next financial year.
What is the expected AUM growth for this fiscal?
We have guided for a 20-25% growth, and we maintain that guidance.
How do you plan to grow while maintaining the asset quality?
Our risk engine Cyclops is being implemented in all our lines of business. We have already implemented it in the two-wheeler, SME and farm equipment finance segments. For personal loans, it will get implemented in this quarter, while housing and rural loans will see the implementation in FY27. A lot of digitisation is going on in collections. We are trying to make the asset quality trajectory more predictable through this.
What is the credit cost guidance for the rest of the year?
We want the credit cost to move towards the 2% range over the next four to six quarters.
Cost of borrowing has gone down by 36 bps on quarter to 7.32% due to the liability mix. Do you see it falling further?
We might see a little more downward movement over the next two quarters.
By when will you completely become a purely retail company?
Our goal is to become a completely retail finance company over the next two to three quarters in terms of assets under management.