IIFL Capital Services (IIFLCAPS) Q2 26/27 earnings summary

Executive summary

• Q2 FY27 operating revenue was ₹7,219 Mn, up 14% QoQ and 22% YoY; operating PBT was ₹2,059 Mn, up 38% QoQ and 25% YoY.

• Q2 PAT was ₹1,266 Mn, up 49% YoY but down 31% QoQ; H1 PAT was ₹3,108 Mn, up 19% YoY.

• Retail, institutional and distribution income advanced; a ₹316 Mn investment MTM loss weighed on Q2 results.

• Fairfax has approvals for a proposed acquisition of up to 51%; implementation remains underway within statutory timelines.

• A wholly owned NBFC subsidiary and leadership succession plans were approved, subject to regulatory and other approvals.

Financial highlights

• H1 FY27 operating revenue was ₹13,534 Mn, up 12% YoY; operating PBT was ₹3,553 Mn, up 8% YoY.

• Consolidated Q2 revenue was ₹69,033 lakh versus ₹54,742 lakh YoY; consolidated PBT was ₹17,426 lakh versus ₹11,990 lakh, and PAT was ₹12,661 lakh versus ₹8,515 lakh.

• Consolidated H1 revenue was ₹141,164 lakh versus ₹122,781 lakh; PBT was ₹41,354 lakh versus ₹34,744 lakh, and PAT was ₹31,078 lakh versus ₹26,068 lakh.

• Q2 total expenses rose 21% YoY to ₹5,161 Mn; finance cost increased 40% YoY to ₹748 Mn.

• Employee costs rose 8% QoQ to ₹194 crore; finance costs rose 25% QoQ to ₹75 crore, depreciation 6% to ₹18 crore and admin expenses 9% to ₹96 crore.

Outlook and guidance

• Investment banking pipeline is robust, with execution expected over the next 4–6 quarters, subject to market conditions.

• Fairfax’s proposed ~₹20 Bn capital infusion is intended to support growth across broking, wealth, asset management, institutional equities and investment banking.

• FPD growth is expected to benefit from higher AUM and an insurance income uptick over the next two quarters; insurance underperformed in Q2 while ARR income grew.

• New wealth operations are expected to break even in 6–18 months; INR 4,500 crore of in-house manufacturing assets are expected to take longer.

• Quarterly employee costs of INR 194 crore were indicated as the expected level for the rest of FY27.