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Created: 2025-07-18 14:18:59 UTC

L&T Finance Ltd: Credit Rating Updates

S&P Global Ratings assigned a first-time 'BBB-' long-term and 'A-3' short-term issuer credit ratings with a Positive outlook. Fitch Ratings also assigned a first-time 'BBB-' Long-Term Foreign and Local-Currency Issuer Default Ratings (IDRs), with a Stable outlook. 🚀

- 𝗞𝗲𝘆 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀:
  ▪ S&P's rating reflects the expectation of ongoing support from the L&T group. L&T holds a XXXXX% stake.
  ▪ Fitch's ratings are driven by the expectation of extraordinary support from parent company Larsen & Toubro (L&T).
  ▪ L&T Finance benefits from being part of the L&T group and its strong brand association.
  ▪ L&T Finance's strong capitalization helps mitigate its business risks.

- 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗣𝗿𝗼𝗳𝗶𝗹𝗲:
  ▪ L&T Finance is a leading player in rural business, two-wheelers, and farm equipment finance.
  ▪ The company has a diversified loan book, with XX% towards the retail segment.
  ▪ Key segments include rural business finance (27%), home loans (25%), farmer finance (15%), two-wheeler finance (13%), personal loans (9%), and SME finance (7%).

- 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹𝘀 𝗮𝗻𝗱 𝗢𝘂𝘁𝗹𝗼𝗼𝗸:
  ▪ Return on adjusted assets was ~2.4% for FY25.
  ▪ Expecting strong retail loan growth and continued reduction in wholesale loans.
  ▪ Credit cost is expected to decline to XXX% by fiscal 2028.
  ▪ Cost-to-income ratio is expected to improve to ~37% by fiscal 2028.

- 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗼𝗰𝘂𝘀:
  ▪ The company is shifting towards more diversified retail lending.
  ▪ Focus on secured lending like mortgages, loans against property, and gold loans.
  ▪ Completed acquisition of the gold loan business from Paul Merchants Finance Pvt Ltd.

- 𝗙𝘂𝗻𝗱𝗶𝗻𝗴 𝗮𝗻𝗱 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆:
  ▪ L&T Finance has access to multiple funding sources.
  ▪ Benefits from the association with the L&T group.
  ▪ Higher proportion of commercial paper compared to the industry.

- 𝗥𝗮𝘁𝗶𝗻𝗴 𝗦𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗶𝘁𝗶𝗲𝘀:
  ▪ The ratings are linked to the sovereign rating on India.
  ▪ Downgrade could occur if the relationship with the L&T group weakens.
  ▪ Upgrade is possible if the sovereign rating on India is raised. ⬆️

📊 L&T FINANCE LTD | 🏷️ Credit Rating

🌐 Details:

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