IIFL Finance Q4FY24 profit after tax at Rs. 431 Crore, down 6% y-o-y

For the quarter ended March 31, 2024, IIFL Finance Ltd reported net profit after tax of Rs. 431 Cr (before non-controlling interest) down 6% y-o-y. Profit before tax (PBT) for the quarter was Rs. 554 Cr down 7% y-o-y. Loan growth in core products was robust - Gold loans and Home loans AUM grew by 13% and 26% y-o-y respectively. Microfinance grew by 34% while Digital loans and Loan against property grew by 71% and 29% y-o-y respectively. Overall core loan portfolio grew by 22% y-o-y.

Mr. Nirmal Jain, Founder, IIFL Finance Ltd., remarked on the financial results: "The regulatory action imposing an embargo on fresh gold loans has significantly impacted our business in the last quarter and continues to do so in the current quarter. We have used this opportunity to enhance our compliance, controls, and operations. We believe that we have fully complied with all regulatory requirements and addressed any deficiencies. The special audit has been completed, and we now await the RBI's review and expect positive action soon. The business environment remains healthy, and we are optimistic about the outlook for all our other business segments."

Mr. Kapish Jain, President & Group Chief Financial Officer, IIFL Finance Ltd., commented on the financial results: "Consistency in performance has been our mantra and once again we demonstrated healthy financial performance reporting ROA of 3.4% and ROE of 18.4% for fiscal 2023-24. With the conclusion of the on ground special audit done at the behest of the RBI and in depth implementation of all the observations highlighted by RBI in inspection report, we firmly believe that we are far better placed today in working & building ourselves for the next phase of controlled and quality growth once the embargo on the gold lending business gets lifted."

Financial performance review

The company's annualized ROE and ROA for Q4FY24 stood at 14.6% and 2.9% respectively. Pre-provision operating profit stood at Rs. 990 Cr. for the quarter up 30% y-o-y. Average borrowing costs for the quarter increased 20 bps y-o-y and 6 bps q-o-q to 9.13%.

98% of our loans are retail in nature and 67% of our retail loans (excluding gold loans which are not classified as PSL loans but are still zero risk weights for the banks on a net exposure basis) are PSL compliant. The assigned loan book, is currently at Rs 16,488 Cr. Besides, there are securitized assets of Rs 274 Cr. Besides the co-lending book* is at Rs 11,639 Cr.

GNPA stood at 2.3% up by 48 bps y-o-y and NNPA stood at 1.2% up 11 bps y-o-y, as at March 31, 2024. With implementation of Expected Credit Loss under Ind AS, provision coverage on NPAs stands at 106%.

Total CRAR2 stood at 19.7% as at March 31, 2024, as against minimum regulatory requirement of 15%. The total presence of branches stood at 4,801 as at the end of Q4FY24 compared to 4,681 branches last quarter,spanning the length and breadth of the country. The company successfully concluded right issue in May 2024 (subscribed 1.35x) raising ₹1,271.83 crores. This fund raise will help further improve the CRAR position of the company making us future ready once the RBI embargo on the Gold finance business gets removed.

Business segment review

Home Loans: At the end of the quarter, retail home loan assets grew by 26% y-o-y and 8% q-o-q to Rs 27,438 Cr. The primary focus in this segment is on affordable and non-metro housing loans. We operate out of 389 dedicated home loan branches PAN India. With this, our subsidiary, IIFL Home Finance, is already meeting the Principal Business Criteria of NHB before the committed timelines of March 2024. IIFL Home finance is also now India's No 1 housing finance company in the sub 20 lakhs ticket size.

Gold Loans: As of March 31, 2024, the gold loan AUM was Rs. 23,354 Cr, up 13% y-o-y and down 5% qo-q. Gold loans are provided through our widespread presence in 2,752 towns/cities across 25 states and 4 Union Territories to salaried, self-employed and MSME customer segments. Our branch led growth model is helping us expand is lesser competitive rural and semi urban branches enabling improved yield.

Microfinance: The microfinance loan AUM stood at Rs. 13,094 Cr, up 34% y-o-y and 8% q-o-q, as at March 31, 2024. The microfinance customer base stood at 29.7 lakh customers operating out of 1,648 dedicated microfinance branches across India.

Loan against property: Loan against property AUM grew by 29% y-o-y and 9% q-o-q to Rs. 8,607 as at March 31, 2024.

Digital loans: Digital loans AUM grew by 71% y-o-y to Rs. 4,302 as at March 31, 2024.

Construction and Real Estate: Construction and real estate AUM stood at Rs. 1,857 Cr, as at March 31, 2024.

Liquidity position

Cash and cash equivalents and committed credit lines from banks and institutions of Rs 6,559 Cr were available as on March 31, 2024. During the quarter, we raised Rs 5,531 Cr through term loans, bonds and refinance. With respect to prominent new lender addition from offshore markets, we added names like Mizuho Bank, a leading private sector bank from Japan. Additionally, Rs 1,669 Cr was raised through direct assignment of loans.

Shares of IIFL Finance Limited was last trading in BSE at Rs. 467.90 as compared to the previous close of Rs. 472.20. The total number of shares traded during the day was 83924 in over 2301 trades.

The stock hit an intraday high of Rs. 481.50 and intraday low of 464.95. The net turnover during the day was Rs. 39986961.00.

Source : Equity Bulls

Keywords

IIFLFinance INE530B01024 Q4FY24 FY2024 ResultUpdate FY24