Are L&T Finance Ltd latest results good or bad?

L&T Finance Ltd's latest financial results for the quarter ended September 2025 indicate a mixed operational performance. The company reported a net profit of ₹734.84 crore, reflecting a year-on-year growth of 5.64%, which is a deceleration compared to the previous year's growth of 16.88%. Total income also showed a year-on-year increase of 7.87%, although this growth is lower than the prior year's 25.06%.
The net interest income for the quarter was ₹4,335.75 crore, marking a 7.87% increase year-on-year, which suggests that the company is managing to sustain its income levels despite a competitive lending environment. The operating profit margin, excluding other income, stood at 61.67%, indicating efficient cost management, although it reflects a modest improvement from the previous quarter.

Return on equity (ROE) was reported at 10.34%, which is considered adequate for a non-banking financial company, although it remains below the company's historical average. The company's debt-to-equity ratio of 3.95 indicates a high leverage profile typical of the sector, which necessitates careful management of funding costs.

Additionally, the company has seen a notable increase in institutional investor participation, particularly from mutual funds, which rose to 10.51%. This growing confidence from institutional investors suggests a positive outlook on the company's operational capabilities.

It is worth noting that L&T Finance has experienced an adjustment in its evaluation, reflecting the complexities of its current operational landscape. The moderation in profit growth and the elevated valuation multiples may require careful consideration from potential investors. Overall, while L&T Finance demonstrates operational stability and institutional support, the deceleration in growth and high leverage present challenges that warrant monitoring.