IIFL Finance (IIFL) Q3 24/25 earnings summary

Executive summary

• Structural growth outlook remains positive, but a tactical slowdown and macro headwinds have impacted earnings and sentiment, especially in unsecured and microfinance segments due to rising consumer leverage and stagnant real income.

• Loan AUM at ₹71,410 crore in Q3FY25, up 7% sequentially but down 8% year-on-year.

• Consolidated PAT (post NCI) at ₹40.7 crore, a recovery from a loss of ₹157.7 crore in Q2FY25, but down 92% year-on-year.

• Exceptional item of ₹586.5 crore provision for AIF investments significantly impacted profitability in Q3FY25.

• Asset quality weakened, with GNPA at 2.4% and NNPA at 1%, both up compared to last year and last quarter.

Financial highlights

• Pre-provision operating profit was ₹534 crore, down 29% quarter-on-quarter and 45% year-on-year.

• Net interest income for Q3FY25 at ₹947 crore, down 14% YoY and 6% sequentially.

• Loan losses and provisions surged 102% YoY to ₹491.4 crore in Q3FY25.

• Basic EPS at ₹1.0 for Q3FY25, down 93% YoY.

• Revenue from operations for the quarter: ₹939.92 crore.

Outlook and guidance

• Gold loan AUM expected to approach pre-ban levels by March 2025, with yields normalizing in the next financial year.

• MFI credit cost guidance at 8%-8.5%; asset quality expected to bottom out soon.

• Strategic focus remains on retail, secured credit to small businesses and homes.

• Management is focused on regulatory compliance and strengthening capital structure.

• Next year anticipated to be a strong growth year after a period of consolidation and challenges.