IIFL Finance (IIFL) Q2 24/25 earnings summary

Executive summary

• Gold loan business faced a six-and-a-half-month RBI embargo, lifted in September 2024, allowing resumption of normal operations and business recovery with strong customer loyalty and compliance enhancements.

• Net loss before non-controlling interest of INR 92 crores for Q2 FY25, and consolidated net loss of ₹93.07 crore, mainly due to a one-time AIF investment provision of ₹586.5 crore as per RBI circular.

• Pre-provision operating profit was INR 722 crores, up 121% YoY and 13% QoQ; non-fund based income rose 23% sequentially to ₹469 crore.

• Asset quality remained stable with GNPA at 2.4% and NNPA at 1.1% as of Q2FY25.

• Board approved unaudited consolidated and standalone financial results for the quarter and half year ended September 30, 2024, with unmodified review reports from auditors.

Financial highlights

• Consolidated loan AUM stood at INR 66,964 crores in Q2 FY25, down 4% sequentially and 8% YoY; core AUM (microfinance, gold, home, digital) grew 7% YoY and 2% QoQ.

• Net interest income for Q2FY25 was ₹995.6 crore, down 2% sequentially and 1% YoY.

• Assigned loan book at INR 13,948 crores, down 24% YoY and 5% QoQ; co-lending assets at INR 8,489 crores, down 20%.

• Cost of borrowing increased by 12 bps YoY to 9.15%; consolidated cost of borrowing stable at 9.1%.

• Cash and cash equivalents at INR 3,882 crores; liquidity position remains strong with free cash and undrawn lines.

Outlook and guidance

• Gold loan book expected to return to pre-embargo levels by March quarter, with growth resuming as liquidity improves.

• Home finance segment expects 17%-18% volume growth for FY25; home loans may grow around 20%.

• Microfinance credit costs projected at 3.5%-4% for FY25, with stabilization expected in H2.

• Consolidated credit cost expected to be around 2%-2.5% for FY25.

• Management confident in full recovery of security receipts portfolio and expects normalization in subsequent quarters.