L&T Finance Earns First-Time ‘BBB-’ Rating From Fitch With Stable Outlook

Image Source : The Economic Times

Fitch Ratings has assigned L&T Finance Holdings Ltd a first-time long-term issuer default rating of ‘BBB-’, with a stable outlook. The rating reflects the company’s solid financial profile, strategic importance within the L&T Group, and its role in India’s retail and infrastructure financing ecosystem.

Key Highlights From Fitch’s Rating Action

- The rating aligns with India’s sovereign rating and indicates moderate credit risk with expectations of stable financial performance
- Fitch cited L&T Finance’s diversified loan book, improving asset quality, and prudent risk management as key strengths
- The stable outlook suggests confidence in the company’s ability to maintain adequate capital buffers and liquidity under current macroeconomic conditions

Operational And Financial Metrics

- L&T Finance has reduced its gross non-performing assets to below 3 percent, reflecting improved underwriting standards
- The company maintains a capital adequacy ratio above regulatory norms, supported by internal accruals and strategic capital infusions
- Retail lending now accounts for over 80 percent of the loan book, with strong growth in farm equipment, two-wheeler, and home finance segments

Strategic Positioning

- As part of the Larsen & Toubro Group, L&T Finance benefits from brand strength, governance oversight, and access to group-level resources
- The company is focused on digital transformation and expanding its footprint in Tier 2 and Tier 3 cities

Outlook

Fitch’s rating affirms L&T Finance’s resilience and strategic relevance in India’s financial landscape. Continued focus on retail growth, asset quality, and digital innovation will be key to sustaining its credit profile.

Sources: Fitch Ratings, Economic Times, Business Standard, Moneycontrol