IIFL Finance: net interest income up 50%, Motilal Oswal keeps Buy rating

what happened

According to a Motilal Oswal research report published by Moneycontrol.com, IIFL Finance's net interest income in 2QFY27 rose 50% year on year and about 8% quarter on quarter, to roughly INR 21.6 billion, in line with expectations. Other income came in at about INR 1.8 billion, around 34% below forecasts, while profit after minority interest reached INR 7.7 billion.

Credit costs were INR 2.8 billion, about 6% lower than the broker's estimate, equal to annualized credit costs of roughly 1.4%. For FY27 management guides to 25% AUM growth, credit costs of 1.5% to 1.7%, and RoE of 16% to 20%. For FY28 to FY30 it targets about 20% annual AUM growth and off-book loan assets near 40%.

why it matters

Motilal Oswal raised its FY27 EPS estimate by about 6%, citing slightly lower opex and credit costs. The Buy rating and INR 760 target rest on a September 2028 SoTP valuation. Investors may also watch the possible equity raise, which management said could affect leverage and RoE.

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