IIFL Finance margin expands to 67.67% as Q4 revenue rises 42.50% YoY
Expenses rose only 12.12% year on year, but interest increased 37.65%; management said FY27 will focus on secured priority-sector lending.
Filed 29 Apr 2026, 20:01 IST · after market close · IIFL Finance Ltd (IIFL)
Key takeaways
- Consolidated operating margin expanded 8.76 percentage points year on year to 67.67% as revenue grew 42.50% and expenses rose 12.12%.
- Net profit increased 147.96% year on year despite a 6.37-percentage-point rise in the tax rate, while other income contributed only 0.86% of pre-tax profit.
- The stock rose 2.66% on the results, a smaller move than its 3.24% median absolute reaction across the past eight results.
Price around the results
Revenue growth outpaced the rise in operating costs
IIFL Finance’s consolidated revenue grew 42.50% year on year and 7.73% sequentially, while operating profit rose 63.69% and 16.37%, respectively. The wider operating-profit growth shows that the revenue increase converted into earnings faster than the cost base. Net profit rose 147.96% year on year and 24.32% sequentially.
Lower operating costs lifted margins despite higher interest
Year-on-year expenses increased 12.12%, well below revenue growth, lifting operating margin by 8.76 percentage points; sequentially, expenses fell 6.75% as revenue rose 7.73%, adding 5.02 percentage points to margin. Interest expense still grew 37.65% year on year and 12.01% sequentially, but it did not prevent the operating improvement. The tax rate rose 6.37 percentage points year on year and 0.78 percentage points sequentially, so the profit increase was not driven by a lower tax burden; other income was only 0.86% of pre-tax profit.
Margin has expanded for three straight quarters
Operating margin rose from 57.09% in Q1FY26 to 59.96% in Q2FY26, 62.65% in Q3FY26 and 67.67% in Q4FY26. The latest margin was 8.26 percentage points above the 59.41% median for the 52 Financial Services peers that had reported the quarter. Sequential momentum was also positive, with revenue up 7.73% and expenses down 6.75%.
Management is shifting emphasis toward secured lending and partnerships
Management said its FY27 strategy will focus on secured priority-sector lending and bank partnerships, while some activities were slowed because of the current market outlook. The company said bank partnerships for Direct Assignment and co-lending collectively account for around 36% of AUM. Management also highlighted AI-led customer journeys and cross-selling of SME and LAP products, and said FY26 established the business as a retail franchise led by gold loans and mortgage assets.
Initial share reaction was positive but within the stock’s usual range
The stock gained 2.66% on the reaction date, with a 3.00% opening gap and a 7.24-times volume ratio. The move was slightly below the 3.24% median absolute reaction across the past eight results. The historical pattern has been mixed, with three positive and five negative reactions, so the initial rise was directionally better than the stock’s recent record but not unusual in size.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,693 cr | ₹3,427 cr | +7.73% | +42.50% |
| Other income | ₹7 cr | ₹5 cr | +34.27% | +131.29% |
| Expenses | ₹1,194 cr | ₹1,280 cr | -6.75% | +12.12% |
| Operating profit | ₹2,499 cr | ₹2,147 cr | +16.37% | +63.69% |
| Operating margin (%) | 67.67% | 62.65% | — | — |
| Interest | ₹1,610 cr | ₹1,437 cr | +12.01% | +37.65% |
| Depreciation | ₹64 cr | ₹53 cr | +20.82% | +25.34% |
| Profit before tax | ₹833 cr | ₹663 cr | +25.60% | +169.06% |
| Tax | ₹209 cr | ₹162 cr | +29.59% | +260.35% |
| Net profit | ₹623 cr | ₹501 cr | +24.32% | +147.96% |
| EPS (₹) | ₹13.80 | ₹10.92 | +26.37% | +182.21% |
Operating margin of 67.67% compares with a Financial Services sector median of 59.41% across 52 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +2.66% | +3.41% |
| Next session | +2.61% | — |
| 5 sessions | +3.19% | +3.19% |
| 15 sessions | +3.50% | — |
| 30 sessions | +16.84% | — |
Volume on the results session was 7.24× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company said FY26 established it as a strong retail franchise led by gold loans and mortgage assets.
Guidance & outlook
- The FY27 strategy focuses on secured priority-sector lending for superior asset quality and bank partnerships.
New initiatives
- The company is pursuing AI-led journeys to enhance productivity and growth.
- The company is focusing on cross-selling SME and LAP products.
- Bank partnerships for Direct Assignment and co-lending collectively form around 36% of AUM.
Problems & risks
- The company states that some activities were slowed down given the current market outlook.
What to watch
- Whether consolidated operating margin holds above 67.67%.
- Whether interest growth remains below revenue growth, which was 37.65% versus 42.50% year on year.
- Whether bank-partner Direct Assignment and co-lending continues to account for around 36% of AUM.