L&T Finance targets 25% CAGR with focus on retail lending | Company News

L&T Finance Ltd is setting ambitious goals for the future, aiming for a 25% compound annual growth rate (CAGR) over the next few years. The company is focusing on strengthening its retail lending business and plans to exit the wholesale segment entirely by 2026, transitioning into a 100% retail non-banking financial company (NBFC).

One of the key initiatives driving this growth is the launch of their new product, the ‘Complete Home Loan’, which is expected to give a significant boost to their mortgage business. The lender is confident that this product will soon surpass microfinance in terms of book size, showcasing the potential for substantial growth in the housing finance sector.

Sudipta Roy, MD & CEO of L&T Finance, expressed optimism about the company’s future prospects, stating, “Fueled by the revival in credit offtake, we will maintain our robust growth trajectory of 25% CAGR over the next few years. With the larger ticket size of home loans, this portfolio is expected to surpass microfinance assets in the coming years.”

Despite the expected growth in the mortgage business, Roy emphasized that micro-lending will likely remain the most profitable segment due to its inherent nature. The company also plans to consolidate its existing financial services offerings for the next two years, capitalizing on the strong growth potential in its current lines of business.

With a total book size of Rs 80,000 crore, L&T Finance’s micro-credit lending currently accounts for 31% of the portfolio, followed by mortgage and loans against property at 23%. The company’s home loan business targets tier-I and tier-II cities, with a minimum ticket size of Rs 30 lakh, and actively collaborates with builders in the real estate sector. Sanjay Garyali, Chief Executive – Urban Finance, highlighted Kolkata as a key market for the company and expressed confidence in achieving stronger growth in the eastern region through the branding of their new home loan product.