IIFL Finance (IIFL) Q2 24/25 earnings summary

Executive summary

• Reported consolidated net loss of INR 93 crores for Q2 FY25, down 118% YoY, mainly due to a one-time AIF investment provision of INR 586.5 crores and the RBI embargo on the gold loan business, which was lifted in September 2024.

• Gold loan business faced a six-and-a-half-month RBI embargo, lifted in September; business is recovering with strong customer loyalty and compliance enhancements.

• Home loans and digital loans showed strong growth, while gold loans and overall AUM declined during the embargo period.

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

Financial highlights

• Consolidated loan AUM at INR 66,964 crores; core AUM (microfinance, gold, home, digital) grew 7% YoY and 2% QoQ.

• Pre-provision operating profit at INR 731.6 crores, up 13% QoQ.

• Net loss after tax for Q2 FY25: INR 93.07 crores (due to exceptional item); H1 FY25: profit of INR 245.09 crores.

• Gross NPA at 2.4%, net NPA at 1.1%, both marginally higher YoY; provision coverage on NPAs at 106%-136%.

• Cash and cash equivalents at INR 3,882 crores as of September 30, 2024.

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%-21% 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.

• Company committed to compliance and maintaining high standards post-regulatory review.