Larsen & Toubro (L&T) will take a decision on the future of its financial services arm in 2026 when it undertakes a groupwide review exercise of its businesses.

L&T Finance Holdings Ltd had recently announced the completion of the merger of its three subsidiaries L&T Finance Limited (LTF), L&T Mutual Fund Trustee Limited and L&T Infra Credit Limited.

“L&T finance was created to seek a licence for a bank but it became increasingly clear that the Reserve Bank of India is not disposed to industrial houses owning banks with significant stakes. Subsequently, we unowned a lot of businesses that we had set up and undertook restructuring. We have now zeroed down on activities that are essentially non-banking in nature. In FY26 we will go through an exercise of what the company will be and in the scheme of things if financial services will have a role to play. If it does we will keep and grow and if there are no roles to play we will see whether it forms part of divestment. It is tentative because we have not yet done any exercise,” R Shankar Raman, who has been elevated as President, Whole-time Director & Chief Financial Officer of Larsen & Toubro, told businessline.


L&T for its financial business will continue to focus on microfinance and rural finance.

“Micro and rural finance are the markets where the commercial banks are unable to reach despite digitisation, we have become an important part of the credit value chain as we present across the country. We have enough capital in the company and our idea is to scale it up. If the business growth is compelling we will look at capital racing. l&T has been investing in divesting business, we have professional managers whose job is to create value for shareholders. There is no emotional attachment to a particular business and based on commercial decisions every five years we review our portfolio,” added R Shankar Raman.

L&T Finance Ltd’s (LT Finance) consolidated net profit rose by 11 per cent year-on-year (YoY) to ₹554 crore in the quarter ended March 2024 (Q4 FY24), on the back of healthy net interest margins (NIMs) and fees. It had posted a net profit of ₹501 crore in Q4 FY23.