Retail-focused non-banking financial company IIFL Finance delivered exceptional financial results for the September quarter of FY27, with consolidated net profit rising 93% year-on-year to ₹805 crore, surpassing analyst estimates of ₹735 crore. According to latest reports, total income increased 23% YoY to ₹4,246 crore while pre-provision operating profit (PPOP) grew 31% YoY to ₹1,355.1 crore. The company's consolidated assets under management (AUM) expanded 38% year-on-year to ₹1,24,268 crore, with annualised return on equity (ROE) reaching 20.8% compared to 11.9% in the previous year. The sharp profit growth was significantly aided by loan losses and provisions falling to ₹280.8 crore from ₹500.3 crore in the corresponding period last year.
Gold loans emerged as the primary growth driver for IIFL Finance, with AUM surging 90% year-on-year to ₹65,729 crore, now constituting 53% of the total portfolio. As reported by latest data, home finance AUM stood at ₹43,070 crore, up 11% quarter-on-quarter, while MSME loans grew 11% QoQ to ₹11,948 crore. The company's gross non-performing assets (GNPA) improved to 0.90%, down from 2.1% in the previous year, while net NPA stood at 0.87%, indicating effective risk management across the secured lending portfolio. The provision coverage ratio remained strong at 91%, indicating robust asset quality management across the secured lending portfolio.
According to latest reports, IIFL Finance continues to lead in AI adoption across the financial services sector. The company is using AI in loan assessments, collections, customer interactions and cross-selling, with voice AI being used in gold loan sales where customer acquisition costs are below 1% of the loan value during the pilot phase. AI-based credit assessments are being used for more than 85% of small and medium enterprise loan-against-property applications, while the company has deployed AI-based fraud detection across all gold loan branches that has analyzed more than 11 lakh images of gold jewellery. The company completed a ₹25 crore tokenised bond transaction, becoming the first non-PSU NBFC in India to do so, while Fitch Ratings upgraded IIFL Finance's Long-Term Issuer Default Rating to 'BB-' from 'B+'.
The company's asset quality metrics remained robust despite the significant growth in loan portfolio. Gross NPA improved to 0.90% from 2.1% in the previous year, while net NPA stood at 0.87%, indicating effective risk management across the secured lending portfolio. IIFL Finance maintains a strong liquidity position of ₹13,805 crore and capital adequacy ratio of 23.5%. The company's interest spread remained stable at 7.4% despite the portfolio mix shifts, highlighting the success of its pivot toward secured lending and improved underwriting standards. Management noted that as gold loan growth moderates, momentum is expected to shift toward home loans and secured MSME lending, supported by the company's strong capital position and AI-led operational efficiencies.
