IKF Finance Q2 FY26: Strong growth momentum with stable asset quality and improving leverage

22 December 2025

Financial Performance (Q2 FY26 vs Q2 FY25): IKF Finance reported a strong financial performance in Q2 FY26, with total income increasing by 37.6% year-on-year (YoY) to ₹222.42 crore, compared to ₹161.62 crore in Q2 FY25. The growth was primarily driven by a sharp rise in interest income, which grew 39.4% YoY to ₹207.2 crore, supported by steady loan book expansion and stable yields. Profit Before Tax (PBT) rose by 31.8% YoY to ₹61.0 crore from ₹46.3 crore in the corresponding quarter last year, despite higher impairment charges. Profit After Tax (PAT) increased by 31.9% YoY to ₹45.5 crore, compared to ₹34.5 crore in Q2 FY25. Earnings Per Share (EPS) improved to ₹5.85, up from ₹4.92 reported in the same quarter last year.

Operational Metrics (Q2 FY26 vs Q2 FY25): Operational performance remained healthy during the quarter, supported by operating leverage and cost discipline. Net profit margin stood at 20.2% in Q2 FY26, broadly stable compared to 21.0% in Q2 FY25, despite elevated credit costs. The debt-to-equity ratio improved meaningfully to 2.31 times from 3.54 times last year, reflecting balance sheet strengthening through equity infusion. Capital adequacy remained strong at 30.9%, well above regulatory requirements. Asset quality stayed stable, with Gross Stage-3 assets at 2.48% compared to 2.25% in Q2 FY25, while Net Stage-3 assets improved to 1.66% from 1.75%, aided by higher provisioning. Provision coverage ratio increased to 33.6% from 22.6% last year.

Strategic Developments: During the quarter, IKF Finance strengthened its balance sheet through preferential allotment of equity shares, supporting growth and deleveraging. Net worth increased sharply to ₹1,798.8 crore as of September 2025, up 92.6% YoY. The loan book expanded to ₹4,946.3 crore, reflecting steady disbursement momentum. The company maintained adequate liquidity, with a liquidity coverage ratio of 594.1%, providing comfort on near-term obligations. Overall performance in Q2 FY26 reflects strong growth momentum, improving leverage metrics, and stable asset quality, with credit costs and funding conditions remaining key monitorables going forward.

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