L&T Finance Stock Soars Over 120%, Poised for Top Market Performance in 2025

L&T Finance is making waves in the market, with its stock price skyrocketing over 120% so far this year. This impressive surge positions the non-banking financial company (NBFC) as a potential frontrunner for top market performance in 2025, even amidst market fluctuations.

The financial services provider's shares have consistently climbed, closing positively in ten of the last eleven months. This upward trajectory has pushed the stock to around ₹300 per share and marks one of its most sustained rallies in recent history. The 2025 gains are on track to be the company's largest annual increase since 2012, contributing to an overall 230% rise in value over the past five years.

Driving this growth, according to Managing Director and CEO Sudipta Roy in a CNBC TV18 interview, is the company's strategic use of artificial intelligence to decrease credit costs, alongside a rapid expansion of its gold loan business. Roy also expressed optimism regarding the recovery of the microfinance sector.

**Microfinance and Gold Loans Spearhead Growth**

Specifically addressing the microfinance (MFI) segment, which accounts for roughly 26% of L&T Finance's loan portfolio, Roy conveyed confidence in its resurgence. He highlighted that disbursements have remained steady, exceeding ₹2,000 crore for several months. Furthermore, collection efficiency is steadily improving, reaching 99.57% in the previous month.

In addition to microfinance, L&T Finance is aggressively pursuing growth in the gold loan market. The company intends to significantly expand its gold loan portfolio from its current size of ₹1,500 crore, according to Roy's statements to CNBC TV18.

**Analyst Ratings Remain Positive**

Global brokerage firm Citi has reiterated its 'Buy' rating for L&T Finance, setting a target price of ₹330. This affirms Citi's confidence in the financial services company's growth prospects.

**Strong Q2 2025 Results**

The company's Q2 2025 performance reflected this positive outlook, with record-high profit after tax and retail disbursements. Retail disbursements reached ₹18,884 crore, marking a 25% year-over-year increase and a 7.8% quarter-over-quarter rise, primarily fueled by personal loans and rural business finance. The retail book grew by 18% year-over-year to ₹1,04,607 crore, while consolidated assets under management (AUM) increased by 15% year-over-year to ₹1,07,096 crore.

L&T Finance is prioritizing expansion of its customer base by increasing market penetration in existing sectors and extending its geographical footprint to further propel growth.

Following the release of the Q2FY26 results, domestic brokerage firms such as ICICI Direct Research and Geojit Financial Services also reaffirmed their 'Buy' ratings on the stock, with target prices ranging from ₹300 to ₹310 per share.

*Disclaimer: This article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor before making any investment decisions.*