IIFL Finance Ltd. has reported a steady financial performance for the quarter ended June 2025, reflecting resilience in its core lending business and disciplined cost management. The company posted a consolidated net profit of ₹2.33 billion and revenue from operations of ₹29.53 billion, driven by growth in retail loans, gold financing, and digital lending platforms.
This performance comes amid a dynamic macroeconomic backdrop, with rising credit demand, evolving regulatory norms, and increased competition in the NBFC space.
Key Highlights from Q1 FY26:
- Consolidated revenue from operations: ₹29.53 billion
- Net profit after tax (PAT): ₹2.33 billion
- Year-on-year revenue growth: 11.2 percent
- Net interest margin (NIM): 7.1 percent
- Gross non-performing assets (GNPA): 2.1 percent
- Loan book size: ₹296 billion
- Digital disbursements accounted for 42 percent of new loans
Revenue and Profitability Overview:
- IIFL Finance’s revenue rose 11.2 percent year-on-year, supported by strong traction in gold loans, home finance, and MSME lending.
- Net profit of ₹2.33 billion reflects stable asset quality and improved operational efficiency, despite higher provisioning in select segments.
- Operating expenses remained under control, with cost-to-income ratio improving to 48.6 percent from 51.2 percent last year.
- Return on assets (ROA) stood at 2.3 percent, while return on equity (ROE) was 14.8 percent, indicating healthy profitability metrics.
Segment Performance and Lending Mix:
IIFL Finance’s diversified lending portfolio includes:
- Gold loans: ₹82 billion, up 9.4 percent quarter-on-quarter
- Home loans: ₹64 billion, with focus on affordable housing
- Business loans and MSME finance: ₹58 billion, driven by digital onboarding
- Personal loans and microfinance: ₹42 billion, with strong demand in Tier-2 and Tier-3 cities
The company continues to expand its reach through phygital models, combining branch presence with digital platforms to serve underserved segments.
Digital Transformation and Strategic Initiatives:
- Over 42 percent of new loans were disbursed digitally, reflecting IIFL’s push toward tech-enabled lending
- AI-based credit scoring and fraud detection tools have been deployed across loan origination systems
- The company launched a new mobile app for gold loan customers, enabling instant top-ups and repayments
- Strategic partnerships with fintechs and payment platforms are being scaled to improve customer acquisition and servicing
These initiatives are aimed at enhancing customer experience, reducing turnaround time, and improving operational scalability.
Asset Quality and Risk Management:
- GNPA stood at 2.1 percent, while net NPA was contained at 0.9 percent, reflecting prudent underwriting and recovery efforts
- Provision coverage ratio improved to 58.4 percent, ensuring adequate buffers against credit risk
- The company continues to monitor stress in unsecured lending and has tightened risk filters in select geographies
IIFL’s risk management framework includes early warning systems, portfolio stress testing, and real-time monitoring dashboards.
Market Sentiment and Shareholding Trends:
- IIFL Finance’s stock closed at ₹323.40 on July 30, 2025, up 2.6 percent post-results
- Promoter holding remains stable at 30.9 percent
- Foreign institutional investors (FIIs) increased their stake to 19.1 percent, signaling confidence in long-term growth
- Mutual fund holdings rose marginally to 1.2 percent
Analysts maintain a neutral-to-positive outlook, citing strong fundamentals, digital momentum, and stable asset quality.
Conclusion:
IIFL Finance has delivered a balanced and forward-looking Q1 FY26 performance, marked by revenue growth, digital acceleration, and disciplined risk management. As the NBFC sector evolves, IIFL’s focus on underserved segments, tech-led innovation, and operational agility positions it well for sustainable growth and stakeholder value creation.
Sources: Moneycontrol, Business Standard, Investing.com India, IIFL Finance Investor Updates
