IIFLNSEQ4 FY26May 7, 2026

IIFL Finance Limited

8,464words
153turns
13analyst exchanges
5executives
Management on call
Nirmal Jain
MANAGING DIRECTOR – IIFL FINANCE LIMITED
R. Venkataraman
JOINT MANAGING
Venkatesh N
MANAGING DIRECTOR– IIFL SAMASTA FINANCE LIMITED
Girish Kousgi
MANAGING DIRECTOR AND
Kapish Jain
CHIEF FINANCIAL OFFICER – IIFL FINANCE LIMITED
Key numbers — 40 extracted
rs,
in this context, our strategy at IIFL has been deliberate and consistent. Over the past few quarters, we have repositioned ourselves in terms of the portfolio now towards secured lending. We exited or
INR1 lakh crore
or business momentum. With this, now I come to business performance. Our loan AUM has crossed the INR1 lakh crore milestone and we added INR1,08,000 crores of total loan assets. Our gold loan continues to be t
INR1,08,000 crore
come to business performance. Our loan AUM has crossed the INR1 lakh crore milestone and we added INR1,08,000 crores of total loan assets. Our gold loan continues to be the standout performer. The business has com
INR623 crore
rter 4 of fiscal '26. The consolidated profit after tax before non-controlling interest stands at INR623 crores, which is up by 24% on a quarter-on-quarter basis. And we recorded pre- provision operating profi
24%
olidated profit after tax before non-controlling interest stands at INR623 crores, which is up by 24% on a quarter-on-quarter basis. And we recorded pre- provision operating profit of INR1,173 crores,
INR1,173 crore
ich is up by 24% on a quarter-on-quarter basis. And we recorded pre- provision operating profit of INR1,173 crores, which is up 80% Y-o-Y and 9% on a quarter-on- quarter basis. For the quarter, the consolidated
80%
-on-quarter basis. And we recorded pre- provision operating profit of INR1,173 crores, which is up 80% Y-o-Y and 9% on a quarter-on- quarter basis. For the quarter, the consolidated loan AUM grew by
9%
sis. And we recorded pre- provision operating profit of INR1,173 crores, which is up 80% Y-o-Y and 9% on a quarter-on- quarter basis. For the quarter, the consolidated loan AUM grew by 38% on a Y-o-
38%
Y-o-Y and 9% on a quarter-on- quarter basis. For the quarter, the consolidated loan AUM grew by 38% on a Y-o-Y basis, and up 10% on a quarter-on-quarter basis to close at INR1,08,180 crores, driven
10%
- quarter basis. For the quarter, the consolidated loan AUM grew by 38% on a Y-o-Y basis, and up 10% on a quarter-on-quarter basis to close at INR1,08,180 crores, driven by gold, which closed at I
INR1,08,180 crore
dated loan AUM grew by 38% on a Y-o-Y basis, and up 10% on a quarter-on-quarter basis to close at INR1,08,180 crores, driven by gold, which closed at INR52,581, up by 150% on a Y-o-Y and 11% quarter-on-quarter bas
INR52,581,
% on a quarter-on-quarter basis to close at INR1,08,180 crores, driven by gold, which closed at INR52,581, up by 150% on a Y-o-Y and 11% quarter-on-quarter basis with a healthy tonnage at 62 tons. If I nee
Guidance — 20 items
Nirmal Jain
opening
“But on the whole, we believe that the business is at an inflection point with new leadership, a sharper product mix aligned to our core strength and improved underwriting, we expect consistent improvement trajectory in our housing finance business as well.”
Nirmal Jain
opening
“We expect continued momentum in our secured lending portfolio and further improvement in our asset quality, scaling up of co-lending as core engine of growth and further gains from AI-led productivity initiatives.”
Nirmal Jain
qa
“So that will be like a conclusion of the assessment process.”
Yash
qa
“Or will we kind of ask for a review or will be appeal for this?”
Yash
qa
“a demerger because we've been talking about this since 2 years, but it's always gotten to this next quarter or to the next year, to want to understand, are there any triggers or -- is there anything happening with regards to the demerger of IIFL Home Finance?”
Nirmal Jain
qa
“Obviously, they need to exit, and there will be the most elegant way to get it listed separately and give exit to private equity investor is through a demerger.”
Yash
qa
“I'm not saying this year or next year, I'm just asking...”
Nirmal Jain
qa
“No, even Samasta can get separated, so there will be demerger, there will be three entities.”
Deepak Poddar
qa
“And I think shortly, you expect some orders or some assessment to come out.”
Nirmal Jain
qa
“If there is any demand assessment in our other companies, 360 One or IIFL Facilities, they have raised some demand, then it will be contested and we'll go again appeal because we believe that those demands are not tenable.”
Risks & concerns — 15 flagged
The industry's focus is clearly stepping towards asset quality, capital efficiency and a sustainable growth, supported by a tighter regulatory oversight and improved risk discipline.
— Nirmal Jain
We exited or scale down higher risk segment and strengthened our balance sheet.
— Nirmal Jain
Two, capital-efficient growth- co-lending and off-book partners at a bank; and three, AI-led operating model to drive productivity and risk control.
— Nirmal Jain
The business has come strongly post normalization with robust growth, stable yield and a very strong compliance and risk framework and this remains our primary growth engine.
— Nirmal Jain
In the last quarter, our AUM have remained flat and profitability remains subdued partly due to higher-than-expected stress in our legacy micro LAP portfolio.
— Nirmal Jain
The company maintains a cautious stance on the MSME and MFI segment, while they have really recovered well, and the collection efficiency continues to show a smart trajectory.
— Kapish Jain
So by when will we kind of understand the impact of this port because there are some speculative reports talking about INR300 crores to INR400 crores?
— Yash
See, significant decline will happen with credit cost because we see 120, 130 basis point decline in credit cost.
— Nirmal Jain
I don't think up to 4.5x is any challenge.
— Nirmal Jain
But whenever the gold prices go up, thenand you will see with other gold companies also, you have probably seen some decline also there.
— Nirmal Jain
We took a decision of not getting into prime because to start with, you will have a challenge on the margin.
— Girish Kousgi
If you look at any affordable company, once they reach a particular size, growing the book was a challenge.
— Girish Kousgi
And earlier, the challenge was growing the book was not a challenge.
— Girish Kousgi
Customer retention, book retention was a challenge.
— Girish Kousgi
And in terms of competition, huge opportunity, and we don't see any challenge at all in terms of growing our book.
— Girish Kousgi
Q&A — 13 exchanges
Q
First, I want to know what's happening with the special audit or the income tax special audit?
Nirmal Jain
Special audit got over long back within 60 days of given period. So the special audit report is submitted to tax authorities as an input for the assessment. So by when will we kind of understand the impact of this port because there are some speculative reports talking about INR300 crores to INR400 crores? I cannot respond to speculative report. So assessment orders have started coming. Quite a few group companies’ assessment order has come. So I believe that in a few days' time, our assessment orders will also come. It's just a matter of few days. But could you elaborate on the impact? Like t
Q
Sir, just on this demerge. So, is there any time line? I mean what should one look at? I mean, by when this can -- we can execute or something like that?
Nirmal Jain
I mean I don't think we cant give you any time line this is not something -- the Board has to decide. The Board of respective companies and shareholders. But this is something which actively they're looking? Would that be the right assumption? See, there's nothing, you know, I'll tell you what. When we have done a demerger of our consolidated entity earlier, and nothing actively looking at it. You take a decision and you start the process. Okay. Understood. Fair point. And on this the special tax audit. Now you mentioned the audit is all done. And I think shortly, you expect some orders or som
Q
Hi, Nirmal. Thanks for the opportunity. Just a quick question on the gold finance. The new regulations are in place from the 1st April despite of the appeals of -- from the banks and NBFCs. So how are we addressing that? Are we going to categorize all our gold loans as consumption loans? Are we going to look at the underwriting part of the gold loans and do the other kind of gold loans? What is the new strategy here? What kind of gold loan growth are we looking at in '27, the other NBFCs? There are new entrant NBFCs as well. And my sense is that there will be a huge distribution footprint that
Nirmal Jain
Okay. So first is the new guidance. So we are fully complied with the new guidelines from 1st April. And basically, loans above INR2.5 lakh, they want the credit assessment to be done and the loans to be monitored. So we have set up our system and detailed credit assessment is done for all the loans above INR2.5 lakh. So I think that in a way is good because companies like us who have good system processes and are trained people, then we can tap this market. So that's the first question that you asked. So I think that is fully in place. Our system process are working. Most of these loans are e
Q
Yes. My first question is the subsidiaries or a group company, which received the tax assessment order, were they also subject to the special audit or it is only for us considering maybe size or nature of the business?
Nirmal Jain
No. Yes, they were not part of special audit. The special audit was only for gold loan primarily. Okay. And Nirmal ji, do we have an access to that audit report or it is directly submitted to the tax authority? No, we had access to the report, but it's submitted to tax authorities. So special auditor discusses with us. Okay. Understood. And secondly, in terms of the off book, which is in the form of DA and co- lending, do we -- I mean, what's the intent of proportion which we want to keep as an off-book AUM? And between the DA and co-lending is the proportion going to change in the favor of ot
Q
Yes. So regarding the special audit, what is the typical time line from the conclusion of the audit until you receive the final assessment order?
Nirmal Jain
No, there's no time line that tax authorities have. But my -- because they already -- so normally, all the group's tax they will do together. So that's what my understanding is. But there's no time line -- I'm not aware of any time line. Okay. And one of the earlier participants mentioned a rumoured tax liability. So are you expecting such high tax liability because we have been mentioning that nothing material should come out of the special audit? So what is the expectation... No adverse outcome, and the demand, whatever it is, it will be contested. But I have absolutely no idea of what is th
Q
Yes, yes. So as we discussed and also you told that the IIFL Home Finance and Samasta needs to be demerged and it is a very logical thing here. Just want to understand your point of view. I know that it will be a Board's decision. But in your point of view, what will be a better way to demerge the company like while we have done the IIFL Wealth and IIFL Capital years ago and completely demerged without any cross holding, will that be a better way or just we will IPO out the Home Finance and Samasta?
Nirmal Jain
So we are saying that needs to be demerged. But I think, yes, that will be a similar way what our earlier way we have done, the demerger. So that's the most clean way of doing demerger that the subsidiary shareholders get the shares in the similar economic interest. And then the parent -- okay, the listed company shareholders get shares of subsidiaries in the same economic ratio, and it gets delisted separately. Okay, okay. Thank you. That’s from my side. Thank you, thank you.
Q
Yes, there are in the queue, I can see the participants. So you can pick them out.
Management
Q
Hi, sir. Congrats for a good set of numbers. I have just one question. Your leverage level has increased meaningfully this year. Obviously, it's following the growth. So what are you thinking about leverage, capital raise? I believe if you want to continue growing at 20%+, you would need capital?
Nirmal Jain
Yes. So there are -- as I discussed, our strategy of growing co-lending and off-book faster will probably keep the leverage also under control and meet the capital requirement also. And at appropriate time, we can raise capital by -- I mean, the debt capital that we continue to raise periodically. And equity whenever the time is right, we'll do that. But without that, I think if we can grow our co-lending and DA to target level of 40 -- between 40% and 45%, we are safe in terms of our leverage as well as capital. So sir, what is the leverage ratio that you would be comfortable with in your boo
Q
Hello. Sir, my question is on tonnage growth. We've seen around 1% growth on a Q-on-Q basis on the gold tonnage. So like what has led to this flattish growth? And secondly, when we are expecting a 25% AUM growth, that will be purely on a tonnage basis you are saying? Or -- and how are we planning to achieve this like the road map for it?
Nirmal Jain
See, tonnage growth in the previous quarter was better, stronger. But see, what has happened is this that customer requirement of loan basically is really not dependent on the price as such. But whenever the gold prices go up, thenand you will see with other gold companies also, you have probably seen some decline also there. But your customers will keep only as much gold as required. So the demand for credit is there. And sometimes tonnage will follow that. So if they can meet their credit requirements without giving extra gold, they will do that. And when the additional gold has to be given,
Q
Yes. So just a continuation question on the net gearing ratio. We've seen that Samasta and Home Finance, both of them have actually operated on -- IIFL Home Finance, especially has operated on quite low leverage, like 2.6, 2.7 net gearing ratio. I just want to kind of understand when will the ROE and ROA pick up here? Because we've just reached single-digit ROE in IIFL Home Finance, right? And we've done very well historically. So what is -- so you guided for 18% -- 18% to 20% growth, IIFL Home Finance, but I still want to understand the ROE and the ROA movement here.
Nirmal Jain
Yes. So good question. So actually, we raised equity in Home Finance 2, 3 years ago. And the book has not grown because some of the businesses particularly micro LAP and one that we discontinue. So therefore, the leverage has also fallen and that has also impacted our ROA, ROE. But this year, as we said that as we grow our disbursements and our loan book and loan AUM, then these things will start falling in place. Which segment are we targeting to get this 18%, 20% growth? So, Girish here. We predominantly focus on affordable and emerging. As we had confirmed earlier, we have shut prime busine
Q
Hi, good evening. Thanks for taking my questions. If I can just understand a bit more on the mortgage loans. Number one, why was the growth almost kind of muted at INR32,000 crores, INR33,000 crores in FY26? How are we thinking about it going forward? And the other part of my question is, how are we looking at competition in this space? So competition is always tough, but do you see the competition accelerating and especially from where I'm coming is that some of the other companies, housing finance companies like Bajaj Housing, PNB Housing, they've been actively entering the affordable and th
Girish Kousgi
Let me take the second and third question first. So one, talking about growth, as I had mentioned earlier, we plan to grow from this year onwards. And the guidance what we have given is about 18% to 20% on AUM on the book and 25% to 27% on disbursement. So if you look at competition, so what is to happen is that amongst all the 4 segments, which is there in the mortgage business today, which is super prime, prime, emerging and affordable largely, housing finance companies are focusing on affordable and emerging to a small extent of prime. We took a decision of not getting into prime because to
Q
Can you share the road map of improving standalone credit rating and how that translates into reduction of cost of funds? Also.
Nirmal Jain
Can you repeat? Your voice is low. Your voice is a little muffled can you repeat please? Yes. Sir, can you share the road map for improving standalone credit ratings and how that translates into reduction of cost of funds? Okay. Thank you. So a road map for standalone credit rating when we have been talking to credit rating agencies, one of the criteria they had was size and maybe INR1 lakh crores is a good benchmark, so that we have crossed. Two our, obviously, they look at the profitability and the capital adequacy. So the road map to improve that is the focus on profitability, focus on asse
Q
Thank you very much, ladies and gentlemen, for joining this call late evening today. For any further queries, we are available, and you can drop an e-mail to our Investor Relations team, and we'll be happy to answer. Thank you very much, and look forward to meeting you again soon.
Nirmal Jain
Yes. Thank you so much. And as Kapish said that you know, anything else, you can always reach out to us by Investor Relations. Also, in the data book, which has got a very detailed Excel sheet about all the relevant data that can go into any details done this quarter. Thank you so much.
Speaking time
Nirmal Jain
57
Yash
25
Moderator
15
Deepak Poddar
10
Girish Kousgi
9
Shubhranshu Mishra
6
Chirag Singhal
5
Murli Khandelwal
5
Parag Jariwala
4
Venkatesh
4
Opening remarks
Kapish Jain
Ladies and gentlemen, thank you very much for joining our quarter 4 earnings call for fiscal year 2025-'26. Joining on this call with me is our Managing Director, Mr. Nirmal Jain, our Joint Managing Director, Mr. R. Venkatraman, Along with them, we have Mr. Girish Kousgi, MD and CEO of IIFL Home finance; and Mr. Venkatesh N, who is the MD CEO for Samasta finance. With this introduction, I handover the call back to Nirmal to give you an update on the entire macro situation and the strategic elements on the company.
Nirmal Jain
Thank you, Kapish. Good evening, everyone, and thank you for joining us this evening. And let me start with a brief perspective on the macro environment. So as you all know, the Indian economy continues to demonstrate resilience with steady GDP growth, moderating inflation and broadly supportive monetary stands. Importantly, credit demand, particularly from the retail and MSME segment remains strong and these are the sectors which are structurally under penetrated. In this backdrop, the NBFC sector is entering a more stable phase after a period of recalibration. The industry's focus is clearly stepping towards asset quality, capital efficiency and a sustainable growth, supported by a tighter regulatory oversight and improved risk discipline. And in this context, our strategy at IIFL has been deliberate and consistent. Over the past few quarters, we have repositioned ourselves in terms of the portfolio now towards secured lending. We exited or scale down higher risk segment and strength
Kapish Jain
Thank you very much, Nirmal. So while our investor presentation and the press release is already on our website for you to refer. However, to read out some of the critical numbers for the quarter, quarter 4 of fiscal '26. The consolidated profit after tax before non-controlling interest stands at INR623 crores, which is up by 24% on a quarter-on-quarter basis. And we recorded pre- provision operating profit of INR1,173 crores, which is up 80% Y-o-Y and 9% on a quarter-on- quarter basis. For the quarter, the consolidated loan AUM grew by 38% on a Y-o-Y basis, and up 10% on a quarter-on-quarter basis to close at INR1,08,180 crores, driven by gold, which closed at INR52,581, up by 150% on a Y-o-Y and 11% quarter-on-quarter basis with a healthy tonnage at 62 tons. If I need to further dissect the AUM, our core products, loan AUM comprising home, gold, MSME and microfinance are up 45% on a Y-o-Y and 11% on a quarter-over-quarter basis to INR1,04,198 crores and this segment aggregates around
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