Q4 25/26

May 5, 2026

Summary

FY26 revenue was flat at INR 2,439 crore as higher costs pressured operating PBT, while Q4 revenue grew 20% YoY. Distribution assets rose to INR 52,000 crore, and management cited near-term market and regulatory pressures.

Ladies and gentlemen, good day and welcome to IIFL Capital Services Limited Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing * then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to the Managing Director of IIFL Capital, R. Venkataraman. Thank you, and over to you, sir. Thank you. Good afternoon and welcome to the Q4 FY 2026 earnings call of IIFL Capital. I am accompanied by my colleague, Ronak, who is our CFO. Recent geopolitical events have triggered a sharp rise in volatility. They have disrupted energy supplies. They have pushed oil prices above $100. And both these have directly impacted inflation and inflation expectations. This has resulted in increased volatility, especially in Indian capital markets. And we saw record FPI outflows in the month of March, and the trend seems to continue. Despite these pressures, India shows relative resilience, and we have strong domestic inclusion flows, which cushion the foreign selling. As we speak, growth outlook remains relatively strong. And I just want to give a caveat. As of now, we have to wait and watch for the monsoon progress to make a full-year GDP growth estimate and call. On a lighter note, the new definition of EBITDA seems to be earnings before Iran and Trump's daily announcements. Coming to full-year numbers, our consolidated results for FY 2026. Operational revenue for the full year stood at INR 2,439 crores, virtually flat on a year-on-year basis. Retail revenue for equities was INR 1,121 crores, which is down 9%, majorly due to the impact of regulatory changes announced by SEBI. This came into effect in the first quarter of last calendar, and hence we had the full year impact. Institutional and investment banking revenues have increased 11%, INR 712 crores versus INR 639 crores. Financial product distribution income has increased by 16%, which is now standing at almost INR 590 crores, close to INR 600 crores. Employee costs, we have seen a steep increase in employee costs to INR 687 crores, and that is basically a combination of both head count, variable pay provisioning as well as a one-time charge of INR 10 crores due to change in labor laws. Finance costs have increased 17% to INR 210 crores because of increased working capital requirements, and that is directly linked to the growth in our NPF book. Depreciation increased 20% on account of investment in branches and technology. Fees and commission expenses increased 8%. That is because of partner payouts. Admin expenses were up 9% due to branding and technology. Operational PBT was down 22%, and that is primarily driven by increase in FY expenses. Other income was about INR 154 crores. That includes a gain of almost INR 90 crores on account of sale of real estate, which was held in IIFL Securities, a subsidiary of the holding company. We also saw MTM due to price movement in BSE shares. Coming to Q4 FY 2026 versus Q4 FY 2025, this is a year-on-year for the last quarter number. Operational revenues were INR 644 crores versus INR 537 crores, up 20%. Retail revenues were up 22% at INR 298 crores. Institutional and IB revenues were about INR 162 crores versus INR 197 crores, and primarily because of both increase in investment banking as well as broking income. FPD income was INR 182 crores, which is down 4% because last quarter in Q4 FY 2025, we had increased brokerage due to certain transactions on NSE shares. Employee costs increased 12% to INR 183 crores, again, because of headcount increase and variable pay increases. Finance cost increased 45%, a steep increase to INR 63 crores because our MTF book increased. Depreciation was up 6% and because of commissioning of new branches and again, technology costs went up. Fees and commission expenses are increased by 30% because of subbroker payouts. Admin expenses was 8% increase again, due to branding and marketing expenses. Operational PBT before MTM changes have gone up 14% on year-on-year basis. If you compare quarter-on-quarter, which is Q4 FY 2026 versus Q3 FY 2026, operational revenue was up 10%. Retail revenues was up 3%, which is virtually flat, including institutional broking was virtually flat at about INR 160 and INR 162 crores, which is virtually unchanged. FPD increase was up 36% to INR 182 crores. Employee cost was flat, roughly an increase of 4%, INR 183 versus INR 175. Finance cost again increased 18% because of growth in MTF book and working capital requirements. Flat depreciation. Fees and commission expenses increased because of higher subbroker payouts. Admin expense reduced to INR 86 crores. Operational PBT again was up 21% on a quarter-on-quarter basis. Now coming to some housekeeping numbers. The average daily turnover was about INR 3,22,886 crores. This is roughly INR 3,20,000 crores in F&O and cash was INR 2,875 crores. This was INR 3,14,660 crores in Q3. Again, a split of INR 3 lakhs roughly INR 12,000 crores in F&O and cash was about INR 2,685 crores. This is basically 3% growth on which is roughly flat. As I mentioned earlier, we have also started getting into manufacturing. We closed our first IIFL Capital Credit Opportunities Fund. We raised about INR 900 crores and this is basically a risk-adjusted high yield kind of fund. Coming to income tax notices, I just wanted to give all of you a heads up. The income tax department has conducted a search under Section 132 of the Income Tax Act. Basically, what had happened was, I think we have also from our own side, because of the block assessment we had filed, we had ad hoc amount of INR 20,000 crores approximately was paid in last quarter. Now what has happened is that we have got a notice which for both IIFL Management and IIFL Facilities for roughly about INR 56 crores combined for the block period from April 1st, 2018 to February 3rd, 2025. The respective companies are in the process of filing appeal against the said order. In case of the holding company, the assessed tax proceedings are still in progress and we have not got any orders or demand notice till date. We believe after considering all available facts and records and also consulting with advisors, there won't be any material adverse impact on the financial position of the group and hence we have not made any adjustments. With this, I come to the end of my talk. Thank you so much and we are open to answer any questions that you may have. 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 their touchtone 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 for a moment while the question queue assembles. First question is on the line of Keshav Karwa from White Pine Investments. Please go ahead. Thank you for the opportunity. I had two, three questions. One is on the underlying growth for FPD AUM, which looks strong and what is driving this growth? See, we have seen a growth in our FPD assets because it was about INR 31,000 crores and it has now become about INR 52,000 crores. And we have seen all-around growth both in mutual fund and other assets also and including our fixed income assets. Yes. Mutual fund assets have grown from INR 14,000 to about close to INR 21,000 crores. So I think basically all products, AIF, MF, mutual funds and also fixed income products have seen some growth. Okay, sir. My second question was, could you please share how many RMs you have added this quarter and overall RM count in FY 2026? Incrementally, how many RMs do you plan on adding for FY 2027 and any AUM target for FY 2027? See, we have currently about 50 wealth RMs and we are close to about 300 odd. We have about 300 old that affluent or PCG broking RMs. Our focus is that we should increase the headcount for wealth RMs this year. I don't have a specific number in mind because last year had been a difficult year for recruitment, but our aim is to add to the cohort of wealth RMs. Coming to asset growth, I think we are close to about INR 52,000 crores and I don't have a number in mind, but we have to increase it. Okay. My third was that we have seen a sequential decline in the MTF book. What led to the decline and going forward, how are you planning to improve the book? Also could you please provide me the break up for institutional equities and investment banking revenues for this quarter? Okay. The basic broad reason for the decline of the MTF book is primarily because of the last quarter increased market volatility in the last quarter due to which MTM impact was also there. Coming to the other question about institutional broking investment banking, I'll give you a rough number. Roughly about INR 700 crores is there and out of it should be about 450 and 250. So it will be in broking and banking. Okay, sir. And sir, you are doing a funding. approximate. There might be 10% up and here and there. But broadly, Okay, cool. Sir, you are doing a funding. Can you throw some light on your plans to use those funds? See, actually, at this point in time, I just want to say that as a company, the board continuously evaluates opportunities to enhance shareholder value, whether it is in terms of potential acquisition, new projects and other such, and combination. At this point in time, I cannot share more with you because there is no event that requires disclosure that we are looking, we are in discussion. As and when we have something very definitive, we will make all appropriate disclosures to the stock exchange as per regulatory guidelines. Okay, sir. Thank you so much. Thank you so much. Thank you. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Yeah. Hi, sir. Welcome, sir. How are you? I am very good, sir. How are you? All well. Just so you know, there is this RBI regulation getting implemented from the 1st of July, right? How do you see the impact of that on your broking business in any form? Also, if you could throw some light, not so much for us, what would be the kind of impact for the industry per se? See, actually, my view is that there will be a short-term impact for sure because of increased working capital requirements and margin requirements. Then over a period of time, the market finds its own level and goes back to the strength. So short-term impact will be there for sure. For us also, there will be marginal impact because we don't do proprietary ourselves, so there's no impact. For clients, I would say the cost of overall trading at that level will increase. Okay. Got that. Technically, sir, from 1st of April, again, there are institutional equity side, there has been a reset of fees that has come in because of the SEBI regulations. So what kind of impact do you see on your realization from the institutional equity side? See, actually, you are talking about the domestic mutual fund fees, right? Yeah. Our opinion or our learning is that the impact will be marginal because already effective rates was plus minus the ease as suggested by the regulator. Okay. Got that. Secondly, sir, when you kind of give the distribution assets is about 52,000 odd crores. This would include all your customer base today, but would it be appropriate to kind of segregate this into the Ultra HNI wealth management that you would be setting up and you are in process of setting up? What would be kind of AUM that you would have got from those kind of customers? To answer your question about the HNI segment, which is the new channel which we have set up. That will be roughly about 12,000 crores, if my memory is correct. Okay. Got it. The product mix will be similar to what you have shared here? Similar. Got that. Thank you. I'll come back in a few if I have more questions. Thanks. Thank you. Thank you. Next question is from the line of Neha R. from Abakkus Asset Manager. Please go ahead. Thank you for the opportunity. Sir, my question is on the MTF income. Out of the FY 2026 income of say INR 39 crores, can you give a split of how much of that is the interest from the MTF book and how much is the interest from deposits with banks? See, roughly it will be roughly 50-50. 50% is MTF and 50% is from fixed deposit. Okay. And sir, last year as a net interest, your margin almost moved about 18%, 19%. What sort of margin do we expect to make on a sustainable basis? How do we see that going, the net interest margin? Can you repeat the question, please? Your voice is not clear. You are talking net interest margin? Yes, sir. The net interest margin, I think last year in 2025, the total net interest margin for 2025 was about 18%, 19%. Sir, is it lower this year, and how do we see that going on a sustainable basis? What sort of margins are we expecting to be on a sustainable basis? Net interest margin 18%, 19%. I think the net interest rate is roughly about 4%. 4% to 5%. Sir, it's INR 173 crores of interest on the MTF done last year on a Last year was INR 200 plus, roughly. You are trying to deduct interest cost from interest expense. No, sir. I was talking about the interest earned on the MTF, on the margin book, which is about INR 173 crores. Sir, this is part of the INR 419 crores of total interest which we did last year. Last year we had approximately INR 420 crores of income, and the MTF book interest was slightly higher. It will be about INR 165. Interest expense we paid out was about INR 180 crores. This interest is very difficult to attribute how much of that is attributable to the interest and how much is to other things. That's the reason I'm not able to give a precise answer, how much of this is interest and how much of that is non-interest. Okay, sir. Lastly on your distribution income. Sir, our assets have grown, but the income has grown relatively higher to INR 122 crores for the quarter. Is it largely insurance-related revenue? Are there any other products that have also contributed? The AUM largely remains the same for us. What exactly has led to this jump on- Basically, there is some component from insurance, some component because of placement of NCDs and fixed income. That was the reason why we had a disproportionate increase in last quarter. Okay. Got it, sir. Thank you. Thank you so much. Thank you. Actually, maybe we should meet face to face. Then I will be able to answer your other question on interest correctly because I am not able to hear you clearly. It is better if we can- Sure, sir. I will connect with you. That is helpful. I will definitely connect with you for this. Thank you so much. Thank you. Thank you. Next question is from the line of Apexa Bajaj from AV Fincorp Private Limited. Please go ahead. Hi. Thank you for the opportunity. Any color on further acquisition by Fairfax? There was a news around that it is going to increase stake by 10%. Well, I can't offer any comments on this. Thank you. As and when there is something definitive, we'll surely make appropriate disclosures as per listing guidelines to the exchanges. Okay. Thank you. Thank you. Thank you. Next question is from the line of Abhijeet Sachare from Kotak Securities. Please go ahead. Good afternoon, sir. Thanks for taking my question. Sir, a slightly hypothetical question. Looking at our net worth of close to INR 3,000 crores, how do you see it in terms of supporting our growth ambitions over the next three years on the broking side and potentially on the wealth management side as well? Actually, we think that we are well-capitalized, and we have enough dry powder to grow. I don't know how to answer your question. Okay. Last four years, I think our net worth has gone from about INR 1,000 crore to INR 3,000 plus crore. Basically all of it from internal accruals. I think we are running a profitable franchise, and all the cash is being used to reinvest in the business. We think that we have enough ammunition to grow. Understood, sir. Sir, initially you had given a comment in terms of the breakup between IB and IE revenues. That was, I think, close to about INR 700 crore. That was for the full year FY 2026, right? Could you confirm on that number? Yes. That is correct. The full year revenue was about INR 712 crore. Understood. Okay. That makes sense. Got it, sir. That will be all. Thank you so much. Thank you so much. Thank you. Next question is from the line of Prayesh Jain from Motilal Oswal. Please go ahead. Sir, just an extension on the previous question. The current net worth of 3,000 odd crores, how is that utilized across your broking, wealth management, and alternates that you're setting up, that will also need seed funds. So how has been the utilization of this net worth currently across the business lines? Actually, the bulk of the business has been put in broking, MTF, and exchange margins. That has been a bit the allocation of capital. With this current net worth and the borrowing limits that we can still have, do you think that we have enough capital or headroom to grow another 20% in the next couple of years, or we would need more capital? I think we have enough to grow by 20% in the next. Got it. And sir, with respect to any plans on new other categories like Fairfax AMC or any plans there, any thoughts with respect to new product categories that you want to get onto? I think as of now, we think that we have all the elements that can help us to succeed in our businesses, which is investment banking, institutional equities, and I would say wealth management. As you know, in the slide also, we have said that we have started manufacturing, both on the PMS platform and the AIF platform, including early stage, late stage, as well as credit fund. We will evaluate opportunities to enhance shareholder value and improve our competitive positioning. As and when something happens, we will make all the necessary disclosures. Got that, sir. Thank you. Thank you so much. Thank you. A reminder to all the participants, anyone who wishes to ask a question, please press star and one. Participants, you may please press star and one to ask a question. Thanks for joining us on the call. Thank you so much. Should you have any further questions, please feel free to reach out to either me or Ronak, and we'll be more than glad to answer all your questions. Thank you so much, and have a nice day. Thank you very much. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines. Thank you.