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IIFL Finance stock tanks 5%; Motilal Oswal comments on Q1 numbers
At 01:40 PM, IIFL Finance shares were trading at ₹488.95, down nearly 3 per cent on the National Stock Exchange. In comparison, Nifty50 was trading in green territory, up by 81 points or 0.33 per cent, quoting 24,936.75. The total market capitalisation of the company stood at ₹20,776.98 crore. In the last 3-month period, the shares of the NBFC firm surged up 40.76 per cent. In comparison, the NSE Nifty 50 index was up 2.2 per cent in the same period.
IIFL Finance Q1FY26 earnings
The company's total revenue from operations for the quarter ended June 30, 2025, stood at ₹2,952.83 crore, up 12 per cent from ₹2,621.02 crore recorded in the year-ago period. Consolidated net profit figure took a hit and declined 19 per cent year-on-year (YoY) during the quarter under review to ₹274.17 crore from ₹338.16 crore recorded in the corresponding period of the previous fiscal year. IIFLs overall assets under management (AUM) stood at ₹83,889 crore in Q1FY26.
On the asset quality front, the company's gross non-performing assets (NPA) stood at 2.3 per cent in Q1FY26, marginally up by 12 basis points (bps) from 2.2 per cent recorded in the previous quarter (Q4FY25). Similarly, net non-performing assets for the June quarter increased by 9 bps to 1.1 per cent, sequentially. IIFL Finance's net interest income (NII) stood at 976.5 crore in Q1FY26, down 3 per cent from ₹1,005 reported in Q1FY25.
The company's home loan AUM grew 14 per cent Y-o-Y in the June quarter, whereas MSME loan AUM rose 13 per cent during the same period. Interestingly, gold loan AUM surged by 85 per cent Y-o-Y.
'The year has started on a strong footing both on the top line and bottom line with the flagship business of gold showing smart AUM growth of 30 per cent Q-o-Q supported by healthy LTV, improving yield and best in class asset quality. We continue to remain cautious on the MSME and MFI space given the current headwinds and would retain our focus on further strengthening the credit, recovery and collection process in this space," said Kapish Jain, group chief financial officer (CFO) of the company.
Brokerage view on IIFL Finance - Motilal Oswal Financial Services
While the recent quarterly earnings were weak, marked by deteriorating asset quality, gold loan growth remains the only bright spot for IIFL Finance, as per Motilal Oswal Financial Services. The stock is currently trading at 1.3x FY27E price-to-book value and 9x PE. That apart, loan growth across all other segments remained sluggish.
"IIFL reported an operationally weak quarter. Very strong growth in gold loans being the only positive. Loan growth remained tepid across all other segments. The company faced asset quality pressures in its MFI, unsecured business loans, and micro-LAP portfolios, which resulted in elevated credit costs. Additionally, NIMs declined further, potentially impacted by interest income reversals on fresh slippages in the quarter," the brokerage firm noted in its first-cut market note, while maintaining a 'Buy' rating on the stock (subject to review post the earnings call).
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