Q1 26/27

Jul 24, 2026

Summary

Q1 FY27 operational revenue was flat at INR 631 crores, while operational PBT rose 4% QoQ and fell ~9% YoY. A proposed Fairfax investment above INR 2,000 crores awaits approvals; distribution income declined amid prior-period insurance and lumpy transaction effects.

This conference is being recorded. I now hand the conference over to the management for the opening remarks. Thank you, and over to you, sir. Thank you. Good afternoon, and welcome to the first quarter FY 2027 analyst call of IIFL Capital. This is R Venkataraman. I am the co-promoter and managing director. Along with me is Ronak Gandhi, who is our CFO. We are living in interesting times. The global environment remains uncertain. Geopolitical developments, commodity price volatility continue to influence investor sentiment and capital flows. With crude touching $100 a barrel, it is to be seen how India is affected in the days to come. Coming to our results. Consolidated operational revenue for the quarter was INR 631 crores, virtually flat quarter-on-quarter and year-on-year basis. On a quarter-on-quarter basis, that is this quarter Q1 FY 2027 versus Q4 FY 2026, our retail broking revenue was INR 297 crores, virtually flat. Institutional and investment banking revenue was up 27%, INR 207 crores versus INR 163 crores in the fourth quarter of last year. Financial product distribution income stood at INR 125 crores versus INR 182 crores in the fourth quarter, which is down 31%, primarily because of two reasons. One is the fourth quarter peak of insurance income, which is typically a fourth quarter effect, and the other is because of lumpy transactional income, which was booked in the previous quarter. Employee costs is almost flat at INR 139 crores versus INR 183 crores. Finance cost decreased 5% to INR 60 crores. Depreciation flat at INR 17 crores. Fees and commission income decreased to INR 139 crores by 8%, primarily because of decrease in debatable payoff, again linked to the digital insurance business. Administrative expense was again flat. Operational PBT INR 149 crores, was up 4% on a quarter-on-quarter basis. Other income was high, INR 590 crores, and that is primarily because of the mark-to-market gains on BSE shares. The BSE shares is something which we have discussed in the previous quarter also. Coming to year-on-year basis, retail revenues was INR 297 crores versus INR 264 crores, which is up 13%. Institutional broking investment banking income was flat, INR 207 crores versus INR 204 crores for the last year first quarter. Distribution income again was down 14%, as I mentioned earlier, because of certain transaction income which was big in the previous year. Employee cost flat INR 179 crores. The finance cost decreased 48% to INR 60 crores because Sorry. Finance cost increased to INR 60 crores from INR 40 crores because of increase in MTF book. Depreciation flat. Fees and commission income increased 4%. Admin income was again flat. Operational PBT INR 149 crores was down approximately 9%. Other income, again, INR 90 crores, mainly because of the gain in BSE shares. Some housekeeping numbers. Average daily turnover was INR 3,15,780 crores, of which F&O was INR 3,12,480 crores and cash was INR 3,300 crores. In Q4, which was INR 3,22,886 crores, of which F&O was INR 3,20,011 crores and cash was INR 2,825 crores, which was down almost 2%. Other updates. I wanted to give an update on the Fairfax investment. During the quarter, Fairfax India Holdings Corporation through FIH Mauritius and its affiliates proposed to increase their shareholding in the company to at least 51% through a combination of fresh investment of equity above INR 2,000 crores at INR 350 per share and the mandatory open offer, which is subject to all customary regulatory and other approvals. Shareholders approved the preferential issue of equity shares at the EGM held on June 1st, 2026. We are at various stages of approval from various regulators including SEBI, NSE, BSE, and IRDAI. Upon completion of the proposed transaction, Fairfax will become the promoter along with the existing promoters, Nirmal and myself. They will also have a right to nominate two directors to the board. We believe that this investment will strengthen our company's capital base, support growth across capital markets, wealth management, asset management, institutional equities, and further enhance our durability and brand through Fairfax's global reach, brand, and financial strength. Coming to the Income Tax note. Income Tax Department, as you are aware, conducted a search under Section 132, which was done in January 2025. The holding company and the subsidiaries have received a demand of INR 124 crores. The respective companies have filed appeal already against the said order to relevant authority under the applicable laws. With this, I have come to the end of my statement, and I will be more than happy to answer any questions that you may have. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait a moment for the question to be submitted. The first question is from the line of Keshav Garg from Whitepine Investment Capital Limited. Please go ahead. Hi, sir. Thank you for the opportunity. I have two questions. First one, how much of the AUM growth was organic? If you see, our AUM has always grown faster than the peers for many quarters, but this quarter it was relatively slower. Why is that? This is my first question. See, if you look at our AUM growth, net collections was roughly about INR 4,000 crores. I think INR 3,625 crores to be very precise. I assume you are talking about the FPD growth, right? So that we have collected about INR 3,300 crores. We have been growing faster. Maybe this is a one-off, and from next quarter we will catch up. Okay. My second question was on the Fairfax transaction. Have you received the funds yet or are they yet to be received? How do you intend to deploy the funds? If the transaction does not get completed, what would be the next step? We have not received the funds. As I mentioned in my opening remarks, this is subject to all regulatory approvals, and at this point in time, the company has applied to various authorities for approval and the approvals are in process. We think that maybe in the next 2-3 months we will get all the approvals, and once the approvals come, only then the preferential allotment can take place. To answer your question, at this point in time, the inflow of those INR 2,000 crores has not happened. Okay, sir. In this quarter, how many RMs did we add? I think we added few RMs. I think less. Single-digit number of RMs. I am so sorry. Can you just repeat? I think, I do not know exact headcount which has added in RM, but it will be very few. It is single digits. Okay. Sir, can you please provide me with a breakup for institutional broking and investment banking revenue? I think institutional equities in this quarter were roughly about INR 200 crores. Okay, sir. Thank you. I am giving you a rough number. It will be in the ballpark, INR 200 crores. Okay. Very good. Thank you. Thank you. Participants who wish to ask questions may press star and one at this time. Ladies and gentlemen, in order to ask a question, you may press star and one now. The next question is from the line of Lalit Mohandew from Equirus Securities. Please go ahead. Yeah. Hi, sir. Sir, just one question. So, like in the presentation, we have a slide which mentions about the AIF and PMS AUM of roughly around INR 4,400 crores. So do we have any income against the same and where does it get highlighted in the P&L statement? So we have, of course, income for this, and I think this is Booked under- It is booked in the financial product distribution. Sure, sir. What are our plans to grow this area? I think that is a good question that you raised. Historically, in the last one year, if you remember my earlier calls also, I was saying that we are going to strengthen and start up our manufacturing. This is a part of our overall manufacturing plan. We have started AIF, we have started PMS, we have a credit fund, we have a late-stage fund. We will continue to, without losing our overall character of open architecture, we want to invest and grow this business. Sure, sir. Yep. Thank you, sir. Yep. Done. Thank you. Participants who wish to ask a question, press star and one now. The next question is from the line of Neha from Aparakaash Investment Managers. Please go ahead. Yeah. Hi. Thank you for taking my question. It is only the implementation of the SEBI regulations from 1st July. Are we seeing any impact from that on the broking business in any way? You are talking about the margin, the RBI guidelines on the margin requirement, right? Right, sir. Yeah. As of now, we are seeing marginal impact because we are not prop traders ourselves, and we did not have large number of that kind of customers. We are not seeing big impact, but my guess is it is still too early to comment. Over a period of time, maybe we will see some impact. Okay. We do expect to see some impact on the volumes or the turnover in this quarter? No, unlikely in this quarter. Okay. Sir, the yield on the distribution has declined to about 0.85 basis points, and it was higher in the previous quarter. What could be the reason for that? FPD income has fallen because of last quarter we had insurance income booked in that, and in the first quarter also we had seen some amount of brokerage income was there. Because of that only the income has fallen and hence the yield. That has a resultant impact on yield. Overall, I think product-wise the yield has not changed. But because of this non-NR income, it has affected. But sir, the mix has largely remained the same, right? With mutual funds or- No, the mix this last quarter was non-NR was higher or insurance was higher. Okay, got it, sir. Okay. Thank you, sir. Thank you. Before we take the next question, we would like to remind participants that you may press star and one now. Participants who wish to ask questions may press star and one at this time. Participants who wish to ask questions may press star and one now. Actually, if there are no further questions now, we can stop and all people can ask questions to me and Ronak Gandhi directly because we have email ID as well as you can reach out to us directly. Sure, sir. We have a question. Do you want me to take that up? Yes, yes, of course. Sure. The next question is from the line of Palash from 360 ONE Capital. Please go ahead. Hello, sir. Thank you for taking my question. I just wanted to ask if you can provide some color on the breakup of the income between the institutional equity broking side and the IB side. That will be really helpful, sir. Thank you. See, roughly they have about INR 200 crores of income on the investment banking, institutional broking, and it will be roughly 50/50 or 60/40. That will be the broad number. Okay. Thank you, sir. That's all. Thank you, Palash. Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you so much for participating, and feel free to reach out to either me or Ronald if you have any more follow-on questions. Thank you so much and have a nice day. Thank you. On behalf of IIFL Capital Limited, I conclude this conference. Thank you for joining us, and you may now disconnect your lines.