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L&T Finance aims at 25pc CAGR, retail lending in focus

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Kolkata, May 15 (PTI) L&T Finance Ltd is aiming at a 25-per cent compound annual growth rate (CAGR) over the next few years, with focus on consolidating its retail lending business, a top company official said on Wednesday.

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The financial services arm of Larsen & Toubro plans to completely exit the wholesale segment by 2026, transforming itself into a 100 per cent retail non-banking financial company (NBFC) from nearly 94 per cent at present.

The company’s new offering – ‘Complete Home Loan’ – signifies a fresh impetus to its mortgage business, he said.

The lender also expects this product to surpass microfinance in terms of book size in the near future.

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"Fueled by the revival in credit offtake, we will maintain our robust growth trajectory of 25-per cent CAGR over the next few years. With the larger ticket size of home loans, this portfolio is expected to surpass microfinance assets in the coming years," MD & CEO of L&T Finance Sudipta Roy said.

"However, even if the mortgage book size surpasses microfinance, micro-lending will likely remain our most profitable segment due to its inherent nature," Roy said.

He also maintained that L&T Finance will consolidate its existing lines of financial services for at least the next two years, as there remains a strong growth potential in its current offerings.

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At present, micro-credit lending accounts for 31 per cent of the company's total book size of Rs 80,000 crore, followed by mortgage and loans against property, which contribute 23 per cent .

The home loan business focuses on tier-I and tier-II cities, with a minimum ticket size of Rs 30 lakh.

L&T Finance actively collaborates with large builders, and it also operates in segments of tractor finance, two-wheeler finance and personal loans as well as the SME sector, the official said.

"Kolkata is a key market for us," said Sanjay Garyali, Chief Executive - Urban Finance.

"We expect to achieve stronger growth in the eastern region through the branding of our new home loan product," Garyali added. PTI BSM RBT

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