L&T Finance lifts operating margin 1.96 pp as Q1 profit rises 13.20% QoQ
Revenue grew +9.90% QoQ faster than expenses, but the stock's initial gain turned into a -4.79% five-session move.
Filed 10 Jul 2026, 17:55 IST · after market close · L&T Finance Ltd (LTF)
Key takeaways
- Consolidated operating margin expanded 1.96 percentage points QoQ as revenue grew +9.90% faster than expenses at +4.47%.
- Consolidated net profit rose +30.70% YoY to Rs 915.99 cr without support from other income, which was Rs 0.00 cr.
- The stock gained +1.07% on the first trading day after results but was down -4.79% after five sessions, versus a historical median absolute move of 1.23%.
Price around the results
Q1FY27 growth accelerated across the consolidated P&L
Consolidated revenue grew +23.09% YoY and +9.90% QoQ, lifting operating profit by +24.79% YoY and +13.46% QoQ. Profit before tax grew more slowly, at +31.07% YoY and +15.12% QoQ, as interest expense rose +20.44% YoY and +12.77% QoQ and depreciation also increased. Net profit nevertheless rose +30.70% YoY and +13.20% QoQ to Rs 915.99 cr.
Revenue growth outpaced costs and lifted margin
Expenses grew +20.39% YoY against revenue growth of +23.09%, while the QoQ gap was wider at +4.47% versus +9.90%; this drove operating-margin expansion of 0.85 percentage points YoY and 1.96 percentage points QoQ. Other income contributed Rs 0.00 cr, or 0.00% of pre-tax profit, so the earnings improvement was not supported by non-operating income. The tax rate rose 1.26 percentage points QoQ and 0.21 percentage points YoY, a modest offset to pre-tax profit growth.
Margin recovered from Q4FY26, but remained just below peers
Operating margin improved from 60.39% in Q4FY26 to 62.35% in Q1FY27, reversing the decline from the 61.67% level in Q2FY26 through Q4FY26. L&T Finance's margin was 0.33 percentage points below the 62.68% median for the 24 Financial Services peers that had reported, placing it 13th from the bottom. The quarter therefore marked a sequential recovery rather than a continuation of the prior three-quarter easing.
Management highlighted FY27 technology and credit-monitoring initiatives
Management said Nostradamus is scheduled to become operational in FY27 across two-wheelers, personal loans, rural business finance, SME and farm segments. The company also said it monitors customers who continue paying LTF's EMI but stop paying external liabilities as an early-warning signal.
The market reaction became weaker over five sessions
After the results, the stock gained +1.07% on the first trading day, a move close to its historical median absolute post-results move of 1.23%. It then fell -4.79% over five sessions; across the last eight result reactions, four were positive and four negative, making the five-session move larger than the stock's usual reaction.
Q1FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹5,243 cr | ₹4,771 cr | +9.90% | +23.09% |
| Other income | ₹0 cr | ₹0 cr | -100.00% | -100.00% |
| Expenses | ₹1,974 cr | ₹1,890 cr | +4.47% | +20.39% |
| Operating profit | ₹3,269 cr | ₹2,881 cr | +13.46% | +24.79% |
| Operating margin (%) | 62.35% | 60.39% | — | — |
| Interest | ₹1,970 cr | ₹1,747 cr | +12.77% | +20.44% |
| Depreciation | ₹63 cr | ₹60 cr | +3.86% | +54.04% |
| Profit before tax | ₹1,236 cr | ₹1,074 cr | +15.12% | +31.07% |
| Tax | ₹320 cr | ₹265 cr | +20.97% | +32.14% |
| Net profit | ₹916 cr | ₹809 cr | +13.20% | +30.70% |
| EPS (₹) | ₹3.60 | ₹3.22 | +11.80% | +28.11% |
Operating margin of 62.35% compares with a Financial Services sector median of 62.68% across 24 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.07% | +1.06% |
| Next session | -1.85% | — |
| 5 sessions | -4.79% | -4.92% |
Volume on the results session was 2.87× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
New initiatives
- Nostradamus is scheduled to be operational in FY27 for 2W, PL, RBF, SME and Farm.
Problems & risks
- The company monitors customers who pay LTF’s EMI but do not pay external liabilities as an early-warning signal.
What to watch
- Whether consolidated operating margin holds above 62.35% in the next quarter.
- Whether expense growth remains below revenue growth after the Q1FY27 gap of 4.47% versus 9.90% QoQ.
- Progress toward management's stated FY27 operational rollout of Nostradamus across five lending segments.