India · Delayed Price · Currency is INR IIFL Finance Earnings Call Transcripts
Fiscal Year 2026
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Loan AUM grew 38% YoY to INR 1,08,180 crore, led by gold loans and secured lending. Asset quality improved, with gross NPA at 1.5% and net NPA at 0.7%. FY27 guidance includes 20%-25% AUM growth for gold loans and 18%-20% for housing finance.
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Q3 FY26 delivered robust growth, improved asset quality, and strong capital metrics, with gold loans and core segments driving AUM up 38% year-over-year. Asset quality improved, credit costs are expected to decline further, and the company remains well-capitalized despite a procedural income tax audit.
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Q2 FY26 delivered strong profit and AUM growth, led by gold loans, while asset quality improved and discontinued products were front-ended for provisions. Guidance for loan losses and ROA remains steady, with home loans and gold loans as key growth drivers.
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Profit rebounded sequentially with strong gold loan growth, but asset quality stress in microfinance and MSME led to elevated credit costs in Q1. Guidance for AUM growth and ROA is maintained, with expectations of improved margins and asset quality in the second half.
Fiscal Year 2025
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Q4 FY25 saw a strong rebound with 10% sequential AUM growth and 208% profit surge, led by gold loans and improved asset quality. FY26 guidance includes higher secured MSME growth, margin improvement, and a return to 40% co-lending/DA share.
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Earnings declined sharply year-on-year due to asset quality stress in microfinance and unsecured segments, but quarter-on-quarter profit rebounded. Gold loan AUM is recovering, with yields expected to normalize next year, and liquidity remains adequate after a recent bond issue.
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Q2 FY25 saw a net loss due to a one-time AIF provision, but core AUM grew 7% YoY and gold loan business is rebounding post-embargo. Credit costs remain elevated in microfinance, while home loans and LAP are expected to grow 17%-20% for the year.
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RBI's embargo on gold loans led to a 50%+ drop in gold loan AUM and impacted overall profitability, but asset quality remained robust and other segments showed resilience. Liquidity and capital positions are strong, with compliance and risk management significantly enhanced.
Fiscal Year 2024
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Q4 profit declined 6% YoY due to RBI embargo on gold loans, while FY24 profit rose 23% YoY. Gold loan AUM and disbursements dropped sharply, but home finance and business loans remained stable. Focus for FY25 is on compliance, with no growth guidance provided.