Indian Railway Finance Corporation (IRFC) announced its unaudited financial results for the quarter and half-year ended September 2026. The company highlighted a strong performance, with profit after tax growing consistently in double digits for five out of the last six quarters. This period also saw a significant increase in revenue and PAT, reflecting successful diversification strategies beyond traditional railway financing.
IRFC Reports Robust Q2 FY27 Financial Performance
Indian Railway Finance Corporation Limited (IRFC) has disclosed its unaudited financial results for the second quarter and half-year ended September 30, 2026. The company expressed satisfaction with its performance, noting that the numbers exceeded both internal guidance and market expectations. This marks a period of consistent growth for IRFC, particularly within its ongoing diversification initiatives.
Key Financial Highlights
During the call, IRFC’s management highlighted that for the past six quarters, the company has achieved double-digit profit growth in five instances. This sustained profitability has positively impacted various financial ratios, including net interest margins. For the first half of FY27, IRFC reported a more than 20% rise in revenue and a more than 10% increase in Profit After Tax (PAT).
Diversification and Growth Strategy
The company is actively pursuing a diversification journey, moving beyond a single-client model. In the last fiscal year, IRFC disbursed approximately INR35,000 crore in non-IR disbursements, a trend expected to continue this fiscal year. Future lending will extend to sectors such as metros, ports, renewable energy, thermal power, and Gencos with railway linkages, as well as road projects.
Looking ahead, IRFC anticipates a significant pipeline of business opportunities, driven by major railway infrastructure announcements such as the Dedicated Freight Corridor project and multiple high-speed rail corridors, collectively valued at over INR20 lakh crore. The company also aims to secure a substantial annual allocation of approximately INR50,000 crore from Indian Railways starting FY28 for the next decade, while continuing to fund non-railway entities within the railway ecosystem.
Risk Management and Financial Strength
IRFC is focusing on managing its borrowing costs and maintaining a diverse borrowing portfolio. Initiatives include increasing the share of 54EC bonds and ECB to reduce its Weighted Average Cost of Capital (WACC), which currently stands at a competitive 6.55%. The company remains committed to preserving asset quality and balance sheet strength in a dynamic interest rate environment.
Investor Confidence and Future Outlook
Management expressed confidence in sustaining growth and profitability, citing a robust internal team and strong compliance measures, including a third consecutive year of nil comment reports from RBI and C&AG. The company expects its AUM to reach nearly INR5 lakh crore by the end of the current fiscal year, potentially by Q3 FY27. IRFC anticipates its PAT to grow steadily, with a projected shift towards a 60% Railways and 40% diversification mix by 2030.
Source: BSE
