IIFL Finance share price ended lower for the 3rd straight trading session on Friday, August 1, 2025. After witnessing a steep fall of over 5% on July 31, the stock plunged more than 10% the following day, hitting a fresh 2-month low. Over the past week, the share price has dropped by 17.35%, triggering concerns among market participants.
The immediate trigger for the decline appears to be the company's Q1FY26 financial performance. IIFL Finance reported a 19% year-on-year fall in net profit at ₹233.4 crore, compared to ₹288 crore in Q1FY25.
One of the key areas of concern was the decline in net interest income (NII), which fell 3% year-on-year to ₹976.5 crore from ₹1,005 crore in the previous year. Simultaneously, the company reported a sharp increase in loan losses and provisions, which more than doubled to ₹512.46 crore, indicating rising stress in its loan portfolio.
The company’s asset quality metrics also showed mild deterioration. Gross non-performing assets (NPAs) inched up to 2.3% at the end of June 2025, up by 12bps as compared to the previous quarter. Net NPAs rose to 1.1% up by 9bps in the same period. Although the changes may appear incremental, they have added to the broader concerns around asset quality.
Despite profitability concerns, IIFL Finance’s overall assets under management (AUM) stood strong at ₹83,889 crore in Q1FY26. The company continued to show growth in most of its business segments, though performance was uneven across verticals.
Non-fund-based income showed a robust increase of 74% year-on-year, rising to ₹661.4 crore. This helped offset some of the margin pressures faced by the company in its core lending operations.
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The recent correction in IIFL Finance's share price reflects investor concern over weakening profitability, rising provisions, and early signs of asset quality stress. However, the company continues to grow its AUM across major segments and shows promise in non-fund-based income.
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Published on: Aug 2, 2025, 12:17 PM IST
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