LTF - L&T Finance Limited Share Price

1. Question: "On credit cost, what will be the pull and push factors for FY27 Q4, considering the annual reset happens each year?"

   Answer: "In FY27 Q4, we anticipate a more favorable review because most of our portfolio will have been underwritten using the Cyclops tool. As slippages have decreased significantly, we expect to see the benefits reflected in our models, which will account for improved asset performance. Our objective is a constructive reduction in credit costs, making us optimistic for Q4FY27."

2. Question: "Given the improved MFI collection efficiency, is the recent credit cost trajectory satisfactory, and should we expect continued improvement?"

   Answer: "Absolutely, the trajectory of credit cost improvements is on track. Slippages consistently decreased this quarter, affirming our confidence in reaching our guidance of 2% to 2.2% by Q4FY27. While fluctuations may occur quarterly, the overall trend is promising."

3. Question: "What drove the increased Stage 2 and Stage 3 provision coverage this quarter?"

   Answer: "The increase in coverage was due to higher provisions mandated for Stage 3 assets pertaining to co-borrower exposures as advised post-RBI inspection. This proactive stance led to an uptick in provisions, ensuring we're adequately prepared for potential risks in our asset quality."

4. Question: "What is your outlook for the unsecured loans share over the next 2-3 years?"

   Answer: "Our aim is to achieve a 60:40 balance between secured and unsecured loans. With the growth in high-yield secured products like Gold Loans and Micro LAP, we plan to reduce the share of unsecured loans gradually, moving towards that target over the coming years."

5. Question: "Do you foresee a lower growth trajectory for the MFI business moving forward?"

   Answer: "Yes, we anticipate MFI growth to stabilize at around 15% to 20%. This adjustment reflects a more cautious approach as we focus on operational stability and credit quality enhancements rather than aggressive growth."

6. Question: "Can you break down the credit cost components, particularly concerning the Standard Asset provision?"

   Answer: "Our credit cost details are included in the presentation. Standard asset provision levels will grow as our business expands, but the focus remains on mitigating risk through responsible lending and management of portfolio quality."

7. Question: "Given the focus on Gold Loans, how are yields compared to other segments?"

   Answer: "Gold Loans have generated a higher yield, and we are strategizing to promote growth across other segments, like Personal Loans and SME financing, to balance our portfolio while securing better margins overall."

8. Question: "Will credit costs normalize in light of your ongoing transformation programs?"

   Answer: "Yes, the focus of our initiatives, such as Project Cyclops, is to ensure that credit costs align closer to normal benchmarks. As we implement these initiatives, we expect continued improvements in both portfolio quality and efficiency."

These questions and answers shed light on the company's financial strategies and outlook for the future.