IIFL Finance reported a strong Q3 FY26, highlighted by a 9.1% quarter-on-quarter growth in loan assets, primarily driven by gold loans. The company’s asset quality improved, with GNPA decreasing to 1.6%. A special audit under Section 142(2A) is underway, which the company clarifies as a procedural step related to an earlier income tax search and insists it will not affect operations or growth plans. Consolidated profit after tax before non-controlling interest was INR 501 crore, up 20% quarter-on-quarter.
Financial Performance
IIFL Finance showcased substantial growth and improved asset quality in Q3 FY26:
- AUM Growth: Consolidated AUM increased by 38% year-over-year and 9% quarter-on-quarter, reaching INR 98,336 crore.
- Gold Loans: Gold loan portfolio crossed pre-embargo levels, standing at INR 43,432 crore with a gross NPA of 0.36%. Specifically, gold loan AUM grew by approximately 26% quarter-on-quarter and around 189% year-over-year.
- Core Products Growth: Key products like home loans, gold loans, MSME loans, and microfinance collectively grew by 46% year-over-year and 11% quarter-on-quarter, amounting to INR 93,767 crore.
- Asset Quality Improvement: Gross NPA improved to 1.6%, and net NPA decreased to 0.8%. Provision coverage ratio stands at 92%.
- Profitability: Consolidated profit after tax before non-controlling interest stood at INR 501 crore, up 20% quarter-on-quarter.
- Capital Adequacy: Consolidated capital adequacy ratio at 27.7%.
Strategic Portfolio Management
IIFL Finance has been strategically reshaping its portfolio by exiting higher-risk segments such as digital unsecured MSME loans, Micro LAP under HFC, and certain MFI geographies. This reset has resulted in a more resilient portfolio with reduced volatility and enhanced risk-adjusted returns.
Liquidity and Borrowings
- Liquidity remains strong, with over INR 9,400 crores available.
- Net gearing stands at 3.6x.
- Raised approximately INR 20,007 crore through term loans, bonds, and commercial paper during the quarter.
- Assigned assets worth INR 7,774 crore to various banks.
- Average cost of borrowing stands at 9.28%.
Special Audit Clarification
IIFL Finance addressed concerns regarding the income tax special audit under Section 142(2A). They clarified that this is a procedural step following an income tax search conducted under Section 132 and is part of the ongoing income tax assessment process. The company states that this audit is not a finding or allegation and has no current financial impact on the company’s operations, capital position, or growth plans.
Future Outlook
The company maintains a positive outlook with a continued focus on growth and improved asset quality. S&P has reaffirmed the company’s international credit rating and revised the outlook to positive, reflecting confidence in the company’s strong and stable fundamentals.
Dividend Announcement
The Board of Directors has approved an interim dividend of INR 4 per share, to be paid in due course.
Source: BSE
