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L&T Fin (Target price – ₹325, Rating – Hold) – “Lakshya 2031 roadmap targets RoA expansion to 3%+…”

ICICIdirect Research 30 Apr 2026 DISCLAIMER

Lakshya 2026 concluded with most targets achieved—retailisation at 98% and retail CAGR at 28%—with Q4FY26 growth at +26% YoY led by personal loans, recovery in rural/MFI (post normalization of collections), and continued traction in two-wheeler and gold finance. As LTF enters FY27, these engines remain intact, with gold loans (target to add 400+ branch), partnership-led personal loans and a normalised rural franchise expected to support >20% AUM growth.
A calibrated shift towards higher-yielding segments (gold loans, micro LAP, prime personal loans), along with declining cost of funds, is expected to keep margins stable despite mortgage yield compression. Simultaneously, operating leverage and AI-led efficiencies (Cyclops, Nostradamus) are expected to improve the combined opex + credit cost corridor from ~6.8% to 5.75–6%, supporting RoA improvement to ~2.8% by Q4FY27E.
LTF has also outlined Lakshya 2031, targeting >20% book CAGR, credit cost <2%, RoA of 3–3.2% and RoE of 16–18%, underpinned by a risk-first, AI-led operating model. The roadmap is supported by structurally lower credit cost from Cyclops-led underwriting and gradual resolution of SR book (~₹4,808 crore), with capital redeployment into high-yielding retail assets providing a sustained RoA tailwind.

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