L&T Finance on Friday reported a 27% year-on-year rise in its consolidated profit after tax (PAT) to Rs 807 crore for the quarter ended March, driven by strong retail disbursement growth and stable asset quality.

For the full year FY26, the non-banking finance company posted its highest-ever annual PAT of Rs 2,981 crore, up 13% year-on-year.

Excluding the one-time impact of the new Labour Code considered in Oct-Dec, annual PAT stood at Rs 3,003 crore. Return on assets (RoA) for the year stood at 2.37%, while return on equity (RoE) improved to 11.25% from 10.87% in FY25. For the quarter ROA stood at 2.40%, while RoE improved to 11.71%.

Retail disbursements surged 62% year-on-year to Rs 24,107 crore in reporting quarter, led by growth in two-wheeler finance, gold loans and personal loans. The retail loan book increased 26% year-on-year to Rs 1.19 lakh crore at the end of March, with retailisation reaching 98% of the overall portfolio. The consolidated loan book stood at Rs 1.21 lakh crore.

Net interest margins plus fees for Q4 improved to 10.47% from 10.41% in the preceding quarter. Credit costs eased to 2.64% in the quarter ended March from 2.83% a quarter ago, while full-year credit cost remained steady at 2.54%.

During the quarter, the company undertook its annual expected credit loss (ECL) model refresh, resulting in a provision realignment across stages with no impact on the profit and loss statement. Slippages moderated sharply to Rs 402 crore in the reporting quarter as against Rs 600 crore in the quarter ended December. The wholesale book continued to run down, declining 14% year-on-year to Rs 2,220 crore as of March-end. Net security receipts reduced 18% year-on-year to Rs 4,808 crore.

Under Lakshya 2031, L&T Finance aims to grow its loan book at over 20% annually, improve return on assets to 3–3.2%, raise ROE to 16–18%, and bring credit costs below 2%.

In a strategic move to expand its digital financial services footprint, the board approved the company’s entry into the pre-paid instruments (PPI) business in the form of wallets and cards, and to act as a third-party application provider (TPAP), subject to regulatory approvals from the Reserve Bank of India and the National Payments Corporation of India.

The board also approved raising funds through issuance of non-convertible debentures in one or more tranches, with the total outstanding not exceeding Rs 1.23 lakh crore, within overall borrowing limits approved by shareholders. Additionally, the company approved issuance of cumulative compulsorily redeemable non-convertible preference shares aggregating up to Rs 6,012 crore in FY27, subject to shareholder approval. On the management front, the board approved the appointment of Sachinn Joshi as Whole-time Director for a two-year term and Raju Dodti as Whole-time Director for a three-year term, both subject to regulatory and shareholder approvals.

The board also recommended a dividend of Rs. 2.75 per equity share for FY26. On Friday, the shares of L&T Finance closed 0.7% lower at Rs 290.05 on NSE.