IIFL Finance Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

IIFL Finance Ltd trades at ₹601, in a confirmed uptrend and 9 weeks into that stage. That is +11.5% against its own 200-day average. It sits at 70% of a 52-week range of ₹419 to ₹680. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 17 straight weeks.

Today the stock is in a confirmed uptrend — week 9 of stage 2, confirmed. At ₹601 it trades +11.5% versus its 200-day average and sits at 70% of its 52-week range (₹419–₹680).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +620% while the NIFTY 500 moved +267% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 17 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

IIFL Finance Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: Not stated in the research file. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. IIFL Finance has confirmed its earnings recovery in Q1 FY27 with PAT of 713 Cr and ROA of 3.1%, but the unexplained collapse in HFC capital adequacy and the parent Tier-1 capital sitting at the regulatory edge have shifted the central risk from credit quality to capital structure.

What is proven. IIFL Finance has confirmed its earnings recovery in Q1 FY27 with PAT of 713 Cr and ROA of 3.1%, but the unexplained collapse in HFC capital adequacy and the parent Tier-1 capital sitting at the regulatory edge have shifted the central risk from credit quality to capital structure.

What is not proven yet. If the capital raise is executed at a P/BV materially below the current 1.7x, it would signal that the market has already lost conviction in the recovery thesis before it is complete — and equity dilution at a significant discount to book would set back the ROE recovery by two to three years. Separately, if Q2 FY27 GNPA rises above 1.7% or the HFC capital adequacy drops below 14%, the credit quality leg of the thesis is broken and the composite recovery story is no longer intact.

🚨 What would change our mind. If the capital raise is executed at a P/BV materially below the current 1.7x, it would signal that the market has already lost conviction in the recovery thesis before it is complete — and equity dilution at a significant discount to book would set back the ROE recovery by two to three years. Separately, if Q2 FY27 GNPA rises above 1.7% or the HFC capital adequacy drops below 14%, the credit quality leg of the thesis is broken and the composite recovery story is no longer intact.

Layer 1 read, 22 August 2026 — KEEP. The eight-quarter profit recovery is real - the share price already re-rated, and an equity raise is pending.

Layer 2 read, 22 August 2026 — BENCH. The recovery is real, but weak capital support makes advancing too early. Profit reached Rs 713 crore and rose for a fifth straight quarter, while off-book partnerships also expanded. Against that, parent capital was called near the edge and the funding route remains open-ended; sector institutions are FLEEING while the capex label is SUPPLY_FLOOD [sector_capital_flows.Finance & Investments - Gold Loan].

What would change Layer 2’s mind. BENCH would flip to ADVANCE if IIFL completes a clearly priced, non-damaging capital solution while Q2 FY27 GNPA stays at or below 1.7% and HFC capital adequacy stays at or above 14%; a discounted raise or breach flips it to DROP.

The test written in advance. Management Consistency Track Record — Management Consistency Track Record by the next result.

The test written in advance. Tax Audit Exposure — Tax Audit Exposure by the next result.

What the company does. Three shocks in FY25 — RBI gold embargo, MFI sector stress, and legacy micro-LAP write-downs — drove ROE to a 5% trough. All three are resolving: PAT stepped up across five consecutive quarters through Q1 FY27, GNPA has fallen from its peak, and the FY27 credit cost guidance of 1.5-1.7% is tracking. The new risk is capital: parent Tier-1 at 12.2% and HFC capital adequacy at 14.7% — down from 42.1% in one quarter without explanation — mean a capital raise is now a near-term necessity, not an option, and the terms of that raise will determine whether the re-rating continues.

🚨 What the surface reading misses. The surface reading is: Sep 2024 PAT loss suggests operating deterioration The research reads it further: The -582 Cr other_income is a provision/write-back booked below the operating line — 416% of the PBT of -140 Cr. Financing margin_pct in Sep 2024 was 19%, within the normal operating range. Revenue held at 2,556 Cr. The business was not operationally loss-making.

🚨 What the surface reading misses. The surface reading is: FY25 PAT fell 71% YoY — severe deterioration The research reads it further: The FY25 collapse is entirely explained by three concurrent shocks: RBI gold-loan embargo, MFI sector NPA cycle, and legacy micro-LAP/unsecured MSME portfolio writedowns. All three are structural/regulatory events now resolved or resolving. FY26 recovery to 1,817 Cr confirms this was a manufactured trough.

Lever 16 · Asset quality — BUILDING. Consolidated credit cost guidance of 1.5-1.7% for FY27 is tracking — Q1 FY27 ROA of 3.1% and ROE of 19.5% are already at or above the guided FY27 targets. What proves it keeps working: Credit Cost Normalization. It stops working if Housing finance GNPA re-widens beyond 2.5% as micro-LAP stress proves more structural; or MFI sector conditions deteriorate before Samasta returns to prior AUM levels.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue For a bank, revenue is everything the franchise earns — interest on the loan book plus fee and other income.

IIFL Finance Ltd reported ₹3,919 Cr of income in the Jun 26 quarter, +32.7% year on year. That is the 5th straight quarter of year-on-year growth. Over 10 years it has compounded at 13.0% a year. The last full year, FY26, came in at ₹13,366 Cr. The last four reported quarters add to ₹14,343 Cr.

FY26 revenue came in at ₹13,366 Cr (+30.6% on the year), capping 10 years at 13.0% compound. The latest quarter (Jun 26) printed ₹3,919 Cr, +32.7% year on year — the 5th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +36.2% growth against the decade's 13.0% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +36.0% over the last 4 quarters against +16.3%/yr over the last 8 — accelerating; TTM profit +338.7% vs +10.7%/yr — accelerating.

Net margin Net margin — what the bank keeps of every ₹100 of revenue after every cost, provision and tax. It is the cleanest single margin we can read for a lender.

IIFL Finance Ltd's net margin is 18.2% in the Jun 26 quarter, +8.9 percentage points against the same quarter a year ago. Across 13 fiscal years the net margin has ranged 5.6% to 26.0%. The current quarter sits inside that band.

The latest quarter's net margin is 18.2%, +8.9 pp against the same quarter a year ago. Across 13 fiscal years the net margin has ranged 5.6%–26.0%.

Why: the numbers show the net margin move clearly, but the cost lines behind it sit below what we hold — so we state the move without inventing its driver.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

IIFL Finance Ltd earned ₹713 Cr of net profit in the Jun 26 quarter, +160.2% year on year. It is the 3rd consecutive quarter of growth. Full-year FY26 profit was ₹1,817 Cr. The 10-year compound rate is 12.6%. That is 18.2% of the quarter's revenue. The same quarter a year earlier earned ₹274 Cr.

Jun 26 profit was ₹713 Cr, +160.2% year on year — the 3rd consecutive quarter of growth. On the full year, FY26 printed ₹1,817 Cr (+214.4%), and the 10-year compound rate is 12.6%.

Why profit moved: revenue contributed +32.7% and the margin +8.9 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +273.1% vs revenue +36.2%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

Asset quality — the ladder Gross NPA is the slice of the loan book where repayments have stopped. Net NPA is what remains after the money already set aside against those loans. Falling is healing; rising is damage arriving.

IIFL Finance Ltd's gross NPA is 1.55% of the loan book in Jun 26, down from 2.34% a year ago. Net of provisions already set aside, 0.82% remains. Across the 12 quarters held here the book has ranged 1.46% to 2.42%. Falling NPAs are a loan book healing; rising NPAs are damage arriving.

Why this happened. The credit cost driver is the primary ROA lever. Discontinued micro-LAP and unsecured MSME portfolios are running off, MFI (Samasta) is recovering with 54% QoQ AUM growth in Q1 FY27, and gold loans carry minimal losses. Q1 FY27 ROA of 3.1% is at the bottom of the guided 3-3.5% FY27 range — suggesting credit cost has normalized faster than guided. The management-qualified 40-50 bps post-tax ROA improvement from credit cost and 20-30 bps from operating leverage is now partially delivered.

Jun 26: gross NPA at 1.55% and net NPA at 0.82%, against 2.34% / 1.13% a year ago. Over the 12 quarters we hold, the book's worst reading was 2.42% and its best is 1.46%.

The synthesis: profit growth at a bank is only as good as the book behind it, and this book is better than a year ago. A note on depth: quarterly provisioning detail is not in our numbers yet, so this ladder reads levels and trend, not the cost of the cleanup.

Why the ladder moved: recoveries, write-offs and slippages each play a part, and that split sits below what we hold — the numbers show the healing; the driver mix does not travel with them.

The loan book We read the loan book through revenue — when the book grows, revenue grows with it. It is a rough proxy, and we say so: rate moves and fee swings can shift it a few points in any one year.

IIFL Finance Ltd's revenue grew +30.6% in FY26 to ₹13,366 Cr, so the book is growing. The latest quarter ran +32.7% year on year. The net margin on that income is 18.2%, +8.9 percentage points against a year ago. Interest income is a proxy for the book; rate moves can shift it a few points in any one year.

Why this happened. Gold loans constitute the majority of AUM and carry near-zero credit cost. Post-embargo, the segment has delivered five consecutive quarters of growth. Q1 FY27 growth of 11% QoQ was split 5-6% from tonnage and the balance from gold price. The 500-branch expansion in FY27 will support tonnage-led growth independent of gold prices, though near-term fixed-cost drag will partially offset efficiency benefits.

FY26 revenue was ₹13,366 Cr, +30.6% on the year, and the latest quarter ran +32.7% year on year. The net margin on that revenue is 18.2% this quarter (+8.9 pp YoY) — growth with a widening margin on it.

The synthesis: a lender compounds when the book grows while the margin holds and the loan book stays clean — gross NPA is the loan-quality read we carry here.

Returns on equity and assets Two numbers rate a bank: ROE — what it earns on shareholder money — and ROA — what it earns on everything it deploys. ROE above ~13–15% earns its keep; below that, growth builds book slowly.

IIFL Finance Ltd earns a return on equity of 13% in FY26. Its trough over the ladder below was 5% in FY25. For a lender the balance sheet is the operating asset, so equity return and asset return have to be read together.

FY26 ROE came in at 13%, recovered from a FY25 trough of 5%. Return on assets is withheld on this page — its two source series disagree for this quarter. That clears the bar a bank must beat for its book value to compound.

Why ROE moved: profit compounded 12.6% a year over 10 years while the equity base grew more slowly — earnings recovering faster than book value builds is what lifts ROE off a trough.

Debt

For a bank, borrowings are raw material, not a warning sign — solvency is read through the returns and the loan book. A manufacturer’s debt is a claim against its profits, so the debt-to-equity lens that works everywhere else misleads on a lender and is not applied here.

A manufacturer’s debt is a claim against its profits; a bank’s borrowings are its inventory — money taken in to be lent out. The debt lens that works everywhere else misleads here, so this page does not apply it. The solvency questions for a bank — is the loan book sound, is the equity earning — are read through the loan-book and returns sections above.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions cut 6.4 points of IIFL Finance Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 23.9% of the company. Promoters moved −0.1 points over the same window, to 24.8%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −6.4 points over 8 quarters to 23.9%; Promoters: −0.1 points over 8 quarters to 24.8%; Domestic institutions: +0.1 points over 8 quarters to 7.5%.

🚨 Why the register moved: foreign institutions drove it (−6.4 points) — distribution into the market’s bid.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

IIFL Finance Ltd: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre. The Z-score was built for manufacturers and is not applied to banks and lenders, so solvency here is read from the capital and asset-quality lines instead.

The safety line in one sentence: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre.

Valuation For a bank we price the book, not the earnings: P/BV is what the market pays for each ₹1 of the bank's net worth. A bank below 1× book is priced below the value of what it owns, net of what it owes.

IIFL Finance Ltd trades at 1.8× P/BV, mid-range by its own standards (51st percentile). Its long-run median P/BV is 1.8×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/BV of 1.8× is mid-range by its own standards (51st percentile), against a long-run median of 1.8× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year book value grew while the price moved +38.2% — price and book moved together, holding the multiple in its range.

The price move, decomposed: over 5y, of the +16.0%/yr price move, ~+20.7%/yr came from book-value growth and ~−4.7 pp from the multiple (compressing); over 10y, of the +16.9%/yr price move, ~+13.2%/yr came from book-value growth and ~+3.7 pp from the multiple (expanding). The split is the honest approximate (price return minus book-value growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the book-value line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 25 August 2026 price, IIFL Finance Ltd was paying for profit growth of about 5.2% a year. Profit itself has compounded 12.6% a year over the past 10 years. Today the market pays 1.8× P/BV, the 51st percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is below what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 25 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

IIFL Finance Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from −70.7% at the trough to +338.7%, a 4-quarter improving streak, ROE lifting at 11.6%. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

4-Factor Sector Score

76.8/100 — rank 1 of 6 in Finance & Investments - Gold Loan · 100% evidence confidence

IIFL Finance Ltd scores 76.8 out of 100 against the 6 companies it is compared with in Finance & Investments - Gold Loan, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 31.8 + 15.7 + 12.3 + 17 = 76.8. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if ROA rolls over or gross NPA rises while sector-relative strength deteriorates.

Said versus delivered

What IIFL Finance Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Home Finance FY27 Guidance Shift · 22 July 2026. In April 2026, management guided to 18%-20% book growth and 25%-27% disbursement growth for FY27. In July 2026, it lowered the book and AUM growth range to 17%-18% while raising disbursement guidance to over 30%, without explaining the changed assumptions or how the revised targets fit together.

HFC Capital Adequacy Changed Materially Without Reconciliation · 22 July 2026. In April 2026, management reported HFC capital adequacy of 42.1% and described the capital position as healthy. In July 2026, HFC capital adequacy was reported at 14.7%, a sharp decline that would materially change the assessment of subsidiary capital headroom, but management did not explain the movement and simultaneously described the figures as well above a roughly 15% minimum threshold.

AI Benefit Maturity Narrative Reversed · 22 July 2026. In April 2026, management said AI was already delivering tangible productivity gains, including lower credit costs and improved operating efficiency. In July 2026, management characterized the AI operating model as still moving from pilot to measurable impact, creating an unresolved difference in whether the benefits are already realized or remain largely prospective for the profitability outlook.

Housing Finance Cleanup Claim vs. Actual Q4 FY26 Performance · 29 April 2026. In the Jan 2026 call, management explicitly declared the housing finance cleanup was done in Q3 FY26 and projected acceleration in the housing portfolio for Q4 FY26. The Apr 2026 call directly contradicts this, with management reporting that housing yields remained flat and profitability was subdued in Q4 due to higher-than-expected stress in the legacy micro-LAP portfolio, characterizing the business as merely at an inflection point rather than in the acceleration that was forecast.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions