Finance

Retail therapy: Inside the business shift at L&T Finance

Published

2 years ago

July 21, 2024

Retail therapy: Inside the business shift at L&T Finance

Roy, a financial sector professional with over two decades of banking experience, has been brought in to change the way the non-banking subsidiary of Larsen & Toubro, the eponymous builder of roads and bridges, does business, and make it as nimble and efficient as a fintech.

Despite the parentage of the engineering giant, in many eyes, L&T Finance has yet to distinctly carve out a space of its own in the financing arena. Indeed, the parent, if anything, has been displeased by the middling performance of the lender over the years.

In February 2022, at a press conference to announce that L&T Finance was exiting the wholesale loans business (funding infrastructure and real estate projects), then L&T chairman A.M. Naik had said, “Over a number of years, the only (L&T Group) company which has not performed and is publicly listed is L&T Finance…Our own board members are saying, to me at least, that greater L&T involvement is desirable so that we can drive the ideas and strategies that we want to implement in L&T Finance.”

Naik was not exaggerating.

Even after being in business for three decades, L&T Finance remains lower down the NBFC pecking order. Its total loan book, almost all (94%) of it retail (personal, home, two-wheeler loans, etc.), stood at ₹85,565 crore at the end of 2023-24.

Mahindra Finance, which started three years before L&T Finance, in 1991, is well ahead with assets under management (AUM) of ₹1 trillion at the end of the last fiscal year. Bajaj Finance, which started out in 1987 as Bajaj Auto Finance Ltd, an NBFC focusing on two- and three-wheeler finance, has eclipsed them both with an AUM of ₹3.3 trillion as of 2023-24.

L&T Finance’s price-to-book value (a measure that compares a company’s market value to its book value), at 1.97, lags peers Shriram Finance (2.17) and Bajaj Finance (5.68), though it is higher than Mahindra Finance’s 1.83, according to data from Bloomberg. In 2023-24, its return on assets—a key profitability metric—stood at 2.23%, again behind Bajaj Finance and Shriram Finance.

Junking Wholesale Loans

A large part of L&T Finance’s lacklustre performance is being blamed on its earlier focus on wholesale loans. Data from Crisil shows that these loans formed 62% of its portfolio as of 31 March 2016. According to equity analysts, that concentration was a result of the parent’s presence in those segments and the focus of the group as a whole on infrastructure.

In August 2022, not long after the press conference mentioned earlier, Naik told shareholders at L&T’s annual general meeting that steps were being taken to make the NBFC a healthier company. “We had very bad NPAs, particularly in the wholesale and realty businesses. We…are constantly looking for some of these sectors to sell, even if necessary at losses, and concentrate more on retail,” he said.

A file photo of A. M. Naik. He was associated with L&T for nearly six decades.

Clearly, the wholesale business was a bad memory that the group wanted to leave behind as quickly as possible.

In June last year, The Economic Times reported that L&T Finance had invited bids from asset reconstruction companies for non-performing wholesale loans to the tune of ₹3,022 crore, across 10 accounts, mostly in the real estate sector.

As of 31 March, its wholesale book had shrunk 72% to ₹5,528 crore, from ₹19,512 crore in the previous fiscal year. And as of the June quarter of 2024-25, it had been pared to 4.8% of the overall loan book.

While it has had a modest retail book over the years, the company is now concentrating entirely on retail loans. A part of the shift toward retail happened under former chief executive officer (CEO) Dinanath Dubhashi, who retired in April, after spending 16 years at L&T Finance. The group is now banking on Roy, a former consumer banking and payments professional from ICICI Bank, to turn its fortunes around. He joined L&T Finance as its chief operating officer in July 2023 and took over the CEO role in January.

Five-pillar Strategy

“For the first six months, I focused on nothing but business,” said Roy, an avid wildlife photographer whose corner office on the eighth floor is full of photographs of tigers shot on his camera. “Dinanath gave me a free hand. The objective was to streamline the business and focus on performance delivery both in terms of credit cost and topline,” Roy told Mint.

As part of the effort to put the financier on a high-growth trajectory, the management has drawn up a five-pillar strategy, which was announced in October. The five pillars are: raising brand visibility, enhancing customer acquisition, sharpening credit underwriting; building a futuristic digital architecture and building capabilities.

L&T Finance’s management has drawn up a five-pillar strategy to speed up growth.

Roy quickly realized that the company needed to improve its brand recall and visibility. “I had noticed something from outside and it was also part of my discussion with SNS (L&T chairman and managing director S.N. Subramanyam) when I was going through the process of coming on board,” said Roy. “I realized that the L&T brand name is reasonably well known and well respected in urban India, but L&T Finance was thought to be predominantly rural.”

The numbers, however, show that L&T Finance’s rural leaning is a matter of perception. Rural and urban retail loans account for an equal share of the bank’s total retail loan book of ₹80,000 crore today.

I realized that the L&T brand name is reasonably well known in urban India, but L&T Finance was thought to be predominantly rural.
—Sudipta Roy

But Roy found that the brand recall and presence in urban areas was “literally next to nothing”.

Brand association is a critical aspect for Roy. While Bajaj Finance is known for its consumer durable finance, Mahindra Finance is associated with financing tractors and Shriram Finance, with used vehicles. L&T Finance, on the other hand, is not associated with any specific aspect. According to Roy, the NBFC’s three fulcrum businesses are micro-loans, tractor finance and two-wheeler finance. He therefore wants the company to be known as a diversified NBFC that “straddles both rural and urban businesses with equal ease”.

Using AI and ML

The new CEO is extremely excited about some of the technological changes at L&T Finance. There is ‘Project Cyclops’ for instance, named after the one-eyed Greek mythological figure, which was announced in a statement last month. A credit risk assessment and automated decision-making digital credit engine, Project Cyclops uses Artificial Intelligence (AI) and Machine Learning (ML) to determine the repayment capability and credit quality of potential customers.

Project Cyclops is a “three-dimensional credit engine” developed internally by a team of 100 developers, said Roy. “Since it was done internally, the cost was about ₹5 crore,” he told Mint.

How will it help? He explained that most of L&T Finance’s revenue comes from high-velocity credit businesses where quick decisions need to be made. “For instance, if a customer comes to a two-wheeler dealership and a lender doesn’t finalize whether it will finance within 30 minutes, he/she goes elsewhere,” said Roy. The new credit engine is expected to enable quick and correct decisions on who the company is lending to, especially microfinance customers, and those who are ‘new to credit’ (first-time borrowers).

“Nothing escapes Cyclops,” said Roy. “Our technology team has been working nonstop for the last 45 days to deliver it…We pushed it into beta mode (user testing to identify bugs) on 18 June and are currently using it in 25 two-wheeler dealerships. Over the next 45 days, we will scale it up to 100% of two-wheeler loans.”

After the two-wheeler business, Cyclops will be used in tractor financing, small business loans and finally for mortgages and personal loans. The financier expects Cyclops to improve underwriting standards in the sanctioning of loans.

Decent Start

Have the change in guard and the five-pillar strategy worked? While it is early to say so decisively, there has been a visible improvement in numbers. According to Roy, about a year ago, L&T Finance disbursed between ₹550-600 crore of two-wheeler loans every month; it now clocks ₹900-1,000 crore. Moreover, from 37% in the June quarter last year, the share of prime (better-rated) customers in two-wheeler loan disbursals had grown to 50% by the end of 2023-24.

L&T Finance disburses between <span class= — L&T Finance disburses between ₹900 crore and 1,000 crore of two-wheeler loans every month.

“It has been going up for close to three quarters now and is serving us well…Our bounce rates (defaults in paying equated monthly instalments) are showing signs of improvement,” said Roy.

In aggregate mortgages and loans against property, it used to do ₹550-600 crore every month; now it does close to ₹900 crore. In rural business finance, the needle has moved from ₹1,550-1,600 crore last year to ₹1,900-2,000 crore per month now.

“We plan to grow our retail book to ₹2 trillion in another four years, by 2027-28,” said Roy. Currently, Federal Bank and Yes Bank have loan books close to this size.

Analysts are upbeat on the company’s push towards retail loans and the move away from wholesale credit. “There have been changes in organization structure, product mix and investments in technology at L&T Finance. We continue to remain bullish on the company and believe all these changes in the organization should eventually lead to balance sheet growth,” said Kaitav Shah, lead BFSI analyst, Anand Rathi Institutional Equities.

Others had similar things to say. According to analysts at JM Financial Institutional Securities Ltd, a combination of factors would allow the lender to report strong returns. These include its shift from wholesale to a high-return retail book; stable asset quality metrics from the thinning of its legacy wholesale book and continuous strengthening of underwriting metrics; and strategic investments in “futuristic technology”.

Tighter Regulation

While aiming for growth, the company also has to navigate a stricter regulatory environment. In September 2022, the RBI classified L&T Finance as an upper-layer NBFC. RBI regulations classify NBFCs into four layers—base, middle, upper, top—based on their size, activity and perceived risks. According to the central bank, once an NBFC is classified as being in the upper layer, “it shall be subject to enhanced regulatory requirement, at least for a period of five years from its classification in the layer”.

The upper layer comprises prominent names such as Tata Sons, LIC Housing Finance and Shriram Finance. For some of the upper-layer NBFCs, the classification came as a challenge since norms mandated them to go public within three years of being identified as one. A few, such as Piramal Capital and Housing Finance, and Aditya Birla Finance, have tried to sidestep it by announcing mergers with their listed parents.

In September 2022, the RBI classified L&T Finance as an upper layer NBFC. **(Bloomberg)**

L&T Finance faced a similar problem. While L&T Finance Holdings, the holding company, was listed, L&T Finance, which appeared on the RBI upper layer list, wasn’t. Last December, the company went through an internal restructuring that avoided listing L&T Finance separately.

Under the merger agreement, L&T Finance, L&T Infra Credit and L&T Mutual Fund Trustee were merged into L&T Finance Holdings Ltd (LTFH) and the new entity has also been named L&T Finance.

Roy believes there has been a harmonization of regulations between banks and upper-layer NBFCs. “We do not consider ourselves different from banks. And that is the message that I have given to the team: consider that you are a bank; consider that the same regulatory standards apply to you and consider yourselves to hold the standard that a bank is expected to hold.”

Interestingly, at one time L&T Finance had ambitions of becoming a bank but decided against it after the RBI made it clear that it would not be giving licences to conglomerates.

The RBI raised the level of capital that banks need to set aside for retail loans and loans to NBFCs, raising risk weights by 25 percentage points to 125%.

On another front, the financier will face a challenging environment as the NBFC sector is staring at a slowdown in growth today. Some of this is the result of the RBI raising the level of capital that banks need to set aside for retail loans and loans to NBFCs, raising risk weights by 25 percentage points to 125%, in an effort to curb their growth and lower the systemic risk. According to estimates by rating agency Icra, 2024-25 growth in AUM is likely to moderate to 17-19% in the base case and 14-16% in the stress cases.

“The unsecured consumer loans segment would be the most impacted and may face a sharp reduction in the growth rates in FY25 after many years of sustained robust growth,” Icra stated in April. “On the other hand, LAP/SME & MFI (loan against property/small and medium business and microfinance) loans, which also drove growth in the last two years, would continue to maintain healthy growth,” it added.

That said, Roy is optimistic about delivering the goods. “As a nonbanking financial services company, we are far more agile (than a bank). We are far more nimble and are able to do things much faster.” He has made a steady start, but it will take much more to catapult L&T Finance into the top league.

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Finance

The CFO who turned Adobe’s finance department into an AI lab | Fortune

Published

6 hours ago

March 22, 2026

Press Room

The CFO who turned Adobe’s finance department into an AI lab | Fortune

Finance chief Dan Durn is turning Adobe’s finance organization into an early proving ground for agentic AI—using autonomous software agents to forecast results, scan contracts, and even answer hundreds of thousands of emails.

The push mirrors Adobe’s broader strategy around agentic AI. For customers, the company lets them choose models, combine them with their own data and Adobe’s, and point agents at specific business outcomes.

Internally, Durn, who is also in charge of technology, security and operations, has taken a similar approach to finance: pairing a rules-based, data-heavy function with AI, within a structure where finance, IT, and security report to one leader so pilots can move to production quickly. “Accuracy is non-negotiable,” he adds; that’s why Adobe is investing in structured data and governance so it can move fast without sacrificing precision, he says.

The rise of AI is rapidly reshaping corporate leadership, accelerating turnover and elevating executives who can deliver fast, tangible results. Even long-tenured leaders face increasing pressure from investors to move aggressively on AI. Recent leadership changes, including the announced retirement of Adobe CEO Shantanu Narayen, highlight how little patience markets now have for perceived hesitation. At the same time, Adobe reported that annualized revenue from its AI-first products more than tripled year over year in its first quarter of fiscal 2026, which ended Feb. 27. Across Fortune 500 companies, this dynamic is creating a new internal proving ground where executives are judged by how effectively, and how quickly, they deploy AI to drive growth, efficiency, and innovation.

Using AI in finance

Inside finance, Durn groups AI use into three buckets: forecasting, anomaly detection, and general productivity.

For forecasting, AI uncovers patterns and signals in data that would be difficult for humans to detect quickly, he explains. Anomaly-detection agents flag performance that’s unexpectedly strong or weak—“things that can get lost in the sea of data”—so finance can intervene faster, he says.

However, Durn says the best examples now sit in productivity, citing three use cases:

1. Extracting information from PDFs

One of the most developed use cases involves “containers” of information—collections of PDFs such as investor transcripts, quarterly reports, and analyst research. Finance teams use Adobe’s PDF Spaces to load documents into a shared digital workspace and use an agentic AI assistant to surface themes, insights, and messaging cues in minutes rather than hours.

A recent Forrester TEI study found Acrobat’s agentic AI Assistant increases efficiencies in document summarization and analysis by 45%. Durn says that matters because “the world’s information lives in PDF,” and AI that turns static content into insights that can be used.

2. Cutting contract review time in half

Adobe is also using agentic AI to overhaul contract reviews across finance and procurement functions including revenue assurance, contract operations, product fulfillment, and vendor management. Instead of finance professionals combing through every clause, an AI assistant scans thousands of contracts, highlights provisions relevant to each function, and flags non-standard terms.

The system has cut review time roughly in half, speeding individual reviews and allowing teams to query the entire contract repository—for example, identifying which contracts include auto-cancellation features or foreign-exchange adjustment windows, Durn says. Adobe built its first prototype by April 2024 and began onboarding teams in January 2025.

3. Automating “common” inboxes

A third area is the “common inboxes” that handle high-volume internal and external email—shared addresses for sales, treasury, finance, and supplier questions. Adobe deployed an agentic AI assistant that auto-tags, prioritizes, routes, and, when criteria are met, auto-responds to emails. Typical queries include supplier billing issues or standard credit-quality questions coming into the treasury from Salesforce.

“In 2025 alone, the system auto-responded to about 300,000 emails across 19 inboxes, saving more than 5,000 hours of manual work and freeing teams to focus on more complex issues,” he says. The tool took about six months to build; beta teams began using it around August 2024, with full rollout in January 2025.

The payoff, he stresses, isn’t headcount cuts but the ability to scale more efficiently as Adobe grows.

Grassroots ideas, decade-long build

Durn traces these finance use cases to Adobe’s long AI journey and a bottom-up idea pipeline. The company has invested in machine learning and AI for more than a decade, initially to understand customer usage patterns and embed intelligence into products—work that laid the groundwork for generative and agentic AI.

Many of the best applications come from “reaching down into the organization” and asking employees where AI could remove friction or make their jobs easier, he says. There are more ideas than capacity, so the team prioritizes those with the greatest impact.

When deciding whether to green-light AI investments, Durn focuses on organizational velocity—the ability of back-office functions to keep pace with faster product innovation. If finance doesn’t adopt AI, he argues, it risks becoming a “rate limiter of growth.”

The actual spend is modest, he adds; much of the work involves change management and process redesign layered onto Adobe’s technology.

Durn’s perspective on change management coincides with new research from McKinsey. To capture the full value of AI, organizations need to go beyond “a piecemeal approach and push for a double transformation—both technical and organizational—that includes reimagining how work gets done across functions and workflows,” according to the report. While 88% of organizations surveyed are now experimenting with AI, fewer than 20% report tangible bottom-line results,, the research finds.

How AI is changing his own job

For his own workflow, Durn relies on AI primarily for insight generation. Ahead of earnings, his team loads pre-earnings research reports, Adobe filings, and peer transcripts into an AI-powered workspace to surface themes and likely investor questions.

Scripts and Q&A preparation are then run through models with guardrails to test whether messaging addresses those themes and to ask, “If I were an investor, what are my key takeaways?”

He sees it as a useful check on clarity and consistency—using AI to validate instincts and sharpen how Adobe communicates with the market.

Finance

UST Finance Students Compete on Global Stage in CFA Research Challenge

Published

18 hours ago

March 21, 2026

Press Room

UST Finance Students Compete on Global Stage in CFA Research Challenge

A select team of students from the University of St. Thomas’ Cameron School of Business has officially launched its bid for the FY 2025–2026 Texas Region CFA (Certified Financial Analyst) Institute Research Challenge, a prestigious competition often referred to as the “Investment Olympics” for university students.

The CFA Institute Research Challenge is an annual competition that provides university students with hands-on mentoring and intensive training in financial analysis. The competition tests students’ analytical, valuation, report writing and presentation skills, challenging them to take on the role of real-world research analysts. The 2025–2026 cycle involves more than 6,000 students from more than1,000 universities worldwide.

Representing UST, the team is comprised of Team Captain Chih Jung Ting, MSF; Vice-Captain Daria Kostyukova, BBA/MSF; Reginald Paolo Laudato, BBA/MSF; Simon Wong, BBA in Finance; and Anjali Sebastian, BBA in Finance.

Finance

Town Finance Director To Step Down In April

Published

1 day ago

March 21, 2026

Press Room

Town Finance Director To Step Down In April

Nantucket’s municipal finance director Brian Turbitt has announced his resignation and will leave his position with the town on April 21st.

“With mixed emotion, I have submitted my resignation from the position of Town of Nantucket Director of Municipal Finance, effective April 21, to pursue an opportunity off-island,” Turbitt wrote in a message to the Current. “I have thoroughly enjoyed working with Town Manager Libby Gibson and her administration during the past 12 years and am extremely proud of all we have accomplished as a team. My time on Nantucket has been the experience of a lifetime, and one for which I am truly grateful and will never forget.”

Turbitt told the Current that despite his resignation, he will still attend the Annual Town Meeting in his current role on May 4th. Turbitt often presents and defends many of the town’s budget requests during the meeting, which falls just weeks after his scheduled departure date.

As the town’s chief financial officer, Turbitt oversees the town’s budget, guiding the $170 million operation. Turbitt has been with the town since 2014, but his 12-year tenure will end next month.