Q3 25/26

May 5, 2026

Summary

Q3 operational revenue was INR 586 crore, while operational PBT fell 27% QoQ amid higher costs; other income included a nearly INR 90 crore property-sale gain. Wealth remains loss-making, with break-even expected closer next year.

Thank you, and good afternoon, friends. Welcome to the Q3 FY 2026 analyst call of IIFL Capital. I am joined on this call with Ronak Gandhi, who is our CFO. Despite a challenging global environment, the Indian economy has remained resilient, demonstrating growth with historically low inflation, improving labor market indicators, and strengthening external financial buffers. Coordinated fiscal, monetary, and structural policies have reinforced macroeconomic stability by supporting investment and consumption. The Trump tariff deal and a fiscally prudent budget with CapEx focus ensure stable macroeconomic environment with a positive bias. The RBI has also raised its real GDP growth projection to 7.4%, signaling confidence in the durability of domestic demand. However, global trade uncertainties and commodity and financial market volatility may cloud the external outlook. Coming to our results. Our consolidated operational revenues for the quarter stood at INR 586 crores. Coming to details on a quarter-on-quarter basis, retail broking income was INR 288 crores this quarter versus INR 271 crores in Q2 FY 2026, which is up 6%, mostly on line of increased F&O volumes. Institutional and investment banking revenues have decreased 14% to INR 160 crores, which was INR 186 crores in the previous quarter. The financial product distribution income was up by 3%, INR 134 crores versus INR 130 crores. Coming to expenses. We have seen an increase in the employee cost to INR 175 crores in this quarter from INR 154 crores in the previous quarter due to variable pay provisioning and a one-time charge of INR 7 crores due to changes in labor laws. Depreciation increased by 13% on account of investment in branches. Fees and commissioning expenses increased by 10% due to higher payouts, which is now standing at INR 130 crores. Admin expenses are 5% to INR 91 crores. Operational profit before tax was INR 119 crores, down 27% on a quarter-on-quarter basis, primarily on account of increase of expenses. Other income was INR 135 crores, and this includes a gain of almost INR 90 crores on sale of real estate property held in IIFL Facilities and also mark-to-market gains on BSE shares. Coming to year-on-year basis. Retail equities revenue was INR 288 crores this quarter versus INR 299 crores in the Q3 FY 2025, which is down 3%. Institutional and investment banking revenues decreased 6%, INR 160 crores this quarter versus INR 171 crores in Q3 FY 2025. FPD income, financial products distribution income, was INR 134 crores versus INR 107 crores up 25% because of increased focus on distribution income. Again, we have seen an increase in employee cost. Employee cost increased 17% to INR 125 crores this quarter versus almost INR 150 crores in Q3 FY 2025 because of increase in headcount also, apart from the variable pay provisions which I spoke about earlier and the 7 crore hit. Depreciation increased 21% to INR 17 crores from INR 14 crores due to set up of new branches and investments in technology. Fees and commissions increased 10% to INR 130 crores because of higher payouts. Admin expense stood at INR 91 crores, almost 30% increase because of increase in technology and branding and marketing costs. Operational PBT was INR 119 crores, before the mark-to-market, which is down almost 35% on year-on-year basis, as I mentioned again, because of increased expenses. Coming to some housekeeping numbers. Average daily turnover this quarter was INR 3,14,660 crores, which was futures and options of INR INR 3,11,936 crores and a cash of INR 2,685 crores, which was in the previous quarter INR 2,63,568 crores. F&O was INR 2,60,956 crores and cash was INR 2,612 crores, which is up 19%. The same was INR 2,78,267 in Q3 FY 2025. F&O was INR 2,75,520 crores, and cash was INR 2,747 crores. There are other inputs. Other updates I want to share with you. First and foremost, there have been media reports regarding some investments in the company. We constantly explore strategic and other opportunities to enhance shareholder value. If and when there is a development that requires any disclosure with SEBI's LODR regulations, we will make it. Coming to income tax matter, the income tax department, as you are aware, has conducted a search under Section 132 in January 2025. In the course of the proceedings, various matters were examined in the holding company and the subsidiaries. We have fully cooperated with the department by furnishing all requisite information and evidences as sought from time to time. As a prudential measure and without prejudice to our rights and contentions, on a consolidated basis, we have paid an ad hoc taxes of approximately INR 27 crores, and this has been accounted for this quarter as tax expense, tax adjustment for five years. The post-search assessment proceedings are currently in progress, and we continue to extend full cooperation. As of now, there is no order demand notice at this point, and hence potential impact at this point is not ascertainable. We believe after considering all available facts and records, there is no material adverse effect on the financial position of the group and no material adjustments are required to be made to the financial statements. With this, I come to the end of my talk, and we are open to handle any questions that you may have. Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touch-tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only hands-up while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions. The first question is from the line of Keshav Karwa from White Pine Investments. Please go ahead. Hi, sir. Thank you for the opportunity. How many RMs did you add this quarter? Also, my second question is, when do you think wealth management business will break even and become profitable? Okay. To answer your second question first, we believe that we are continuing to invest in the wealth management practice. I hope that at this point in time they are loss-making, but by next year we should be closer to break even. Second thing is about the RMs. If you see, we have two channels, basically wealth as well as the Private Client Group or the existing RM base. Effectively, we have lost some RMs in the existing PCG or the existing broking space. We have added marginally because I think we have added about 2, 3 RMs this quarter in the wealth space. As I mentioned in the earlier call, this space is becoming increasingly competitive. I think everybody is facing recruitment challenges and hence we are going slow in the way we are recruiting. As we speak right now, we have about 470 RMs on a combined wealth and the old Private Client Group. My question was that by year-end, in FY 2026, how many RMs do you see to add? I think we will be adding maybe another 10-15 RMs. Beyond that, I do not think that will happen in the next two months. Okay, sir. Thank you. A reminder to all the participants that you may please press Star and 1 to ask questions. The next question is from the line of Aditya Bhatia from Electron Capital. Please go ahead. Thank you for the opportunity. Just a question regarding the distribution assets. For the last nine months, I have been seeing that the mix is increasing towards our TBR rather than the ARR, which we will expect towards wealth management. Just if your comments on that will be really helpful. No, actually, if you see that mix between TBR and ARR has been broadly in the 60-40 range. I think last quarter, we have seen some increase in the fixed income space because of increased allocation of fixed income like NCDs. We would hope that in the going ahead also we will be in the 60 to 40 range or maybe 65, 35. I think last quarter we have seen some increase in TBR assets simply because of more NCDs and fixed income allocation. Okay, understood. So 65, 35 going forward? 60, 40, 65, 35. I think it is better if you take it as 60, 40. Okay, 60, 40. Okay. Secondly, if you can give me the split between IE and IB income. See, basically, last quarter, roughly I think Insti was INR 100 crores, no, last year? Yes. Broking was about INR 100 crores or INR 160 crores. Understood. And I was wondering also if you can tell me what is the yield that we're making on our broking income for institution as well as retail? I think the broking yields is like all the institutional business. I don't have the data upfront. Hello? I don't have the data upfront, so maybe- Okay. I'll contact you offline and share that. Sure. Okay. That is all from my end. Thank you. Thank you so much. Thank you. You may please press Star and one to ask questions at this time. Overall. Participants who wishes to ask questions may please press Star and one now. If there are no more questions, I want to thank the participants and Raunaq and I are available to answer any questions you have. You can connect offline also to discuss the same. Thank you, members of the management. Ladies and gentlemen, on behalf of IIFL Capital Services Limited, that concludes this conference. We thank you for joining us and you may now disconnect your line. Thank you. Thank you.