L&T Finance aims 25% CAGR in 3-4 years by focusing on retail; check details
Larsen & Toubro (L&T) Finance aims to maintain a compound annual growth rate (CAGR) of over 25 per cent predominantly by focusing on retail financing as a long-term strategy, a senior company official told news agency PTI on June 11. With the current growth rate, the retail portfolio of the group is estimated to reach ₹1,00,000 crore by fiscal 2025-26. L&T Group’s non-bank financing vertical grew by 35 per cent in FY23.
‘’Our CAGR for the next few years will continue to be at least 25 per cent with the opportunities lying ahead,” L&T Finance group CFO Sachinn Joshi told the news agency. L&T Finance Group would predominantly become a retail finance company in the long term, gradually reducing the wholesale book from its existing portfolio, which is around ₹19,500 crore now, according to PTI.
Also Read: L&T Finance Holdings board recommends final dividend of ₹2 per share, details here
In the current fiscal year, the company officials expects retail to reach 80 per cent of the total loan book, two years ahead of the target under its goal “Lakshya.” The group’s non-banking finance companies’ loan book currently stands at about ₹81,000 crore spread across its group companies.
The share of retail in the total loan book is expected to scale up to about 90 per cent by fiscal 2025-26 from around 75 per cent, fueled by streamlining with the ongoing corporate restructuring. The infrastructure and engineering conglomerate is currently undergoing a restructuring process, through which it will amalgamate its finance subsidiaries, L&T Finance, L&T Infra Credit, and L&T Mutual Fund Trustee with the listed entities L&T Finance Holding to focus more on retail financing and simplify the corporate structure.
The wholly-owned subsidiaries have received approval from the Reserve Bank of India. L&T Finance’s Joshi added that the merger process would be completed within the current fiscal year, and post that, the management will explore dropping the word “Holding” from the company’s name.
This comes few days after L&T Finance Holdings board declared a final dividend of ₹2 per equity share of the face value of ₹10 per share for the financial year 2022-23, according to a regulatory filing by the company to the stock exchanges.Read
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Updated: 11 Jun 2023, 10:22 PM IST
