IIFL Finance reports 32% YoY rise in Q2FY24 net profit

IIFL Finance unveiled its Q2FY24 financial results, revealing a notable profit after tax (PAT) of Rs. 526 Crore, marking a 32% rise from the previous year. For the quarter ending September 30, 2023, the profit before tax (PBT) stood at Rs. 684, indicating a 29% y-o-y growth.

Financial Highlights from the Quarter

The company showcased a robust loan growth across core products. The Asset Under Management (AUM) for Gold loans surged by 33%, while Home loans saw an increase of 22% y-o-y. Other segments like Microfinance and Digital loans grew by a striking 67% and 77% y-o-y, respectively. Additionally, the Loan against property segment grew by 21%. The overall core loan portfolio experienced a significant 34% y-o-y growth.

Founder and CFO Comments on the Financial Outcomes

Nirmal Jain, Founder of IIFL Finance Ltd., commented on the robust financial results, “Our strategy, largely targeting retail loans in under-banked segments and credit scarce regions, has borne fruit. Our thrust on digital technology coupled with the nation’s advanced digital infrastructure, machine learning, and artificial intelligence assures us of transformative changes in the lending sphere. We are gearing up in terms of technology and human resources to capitalize on the retail lending potential in India.”

Kapish Jain, President & Group CFO, remarked, “Our growing market share solidifies our stance as a leading player in the core retail sectors we’re engaged in. This growth is also streamlining our operational costs relative to the average AUM.”

Detailed Financial Performance Overview

For Q2FY24, the company’s annualized Return on Equity (ROE) and Return on Assets (ROA) were 20.1% and 3.9%, respectively. The pre-provision operating profit amounted to Rs. 922 Crore, marking a 41% y-o-y growth. The company’s Gross Non-Performing Assets (GNPA) and Net NPA stood at 1.8% and 1.0% respectively, indicating a decline y-o-y. The provision coverage on NPAs is at 159%.

Business Segment Performance Analysis

In terms of individual business segments:

• Home Loans: Experiencing a 22% y-o-y growth, the retail home loan assets reached Rs. 24,009 Cr.
• Gold Loans: Demonstrating a 33% y-o-y growth, the gold loan AUM amounted to Rs. 23,690 Cr.
• Microfinance: The AUM for this segment stood at Rs. 11,307 Cr, marking a 67% y-o-y rise.
• Loan Against Property: Registered a growth of 21% y-o-y, taking the AUM to Rs. 7,196.
• Digital Loans: Witnessed a whopping 77% y-o-y growth, resulting in an AUM of Rs. 3,539.
• Construction and Real Estate: This segment’s AUM was Rs. 2,824 Cr.