Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
IIFL CAPITAL SERVICES LIMITED (NSE: IIFLCAPS) Q4 2026 Earnings Call dated May. 05, 2026
Corporate Participants:
R. Venkataraman — Managing Director
Analysts:
Keshav Kanwa — Analyst
Unidentified Participant
Presentation:
Keshav Kanwa — Analyst
Sat.
Operator
Good day and welcome to iasl Capital Services Limited Q4FY26 earnings conference call. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to the Managing Director of IFL Capital, R.
Venkataraman. Thank you and over to you sir.
R. Venkataraman — Managing Director
Thank you. Good afternoon and welcome to the Q4FY26 analyst call of IFL Capital. I am accompanied with my colleague Ronak who is our cfo. Recent geopolitical events have triggered a sharp rise in volatility. They have disrupted energy supplies, they have pushed oil prices above $100 and both these have directly impacted inflation and inflation expectations. This has resulted in increased volatility especially in Indian capital markets and we saw record SPI outflows in the month of March and the trend seems to continue.
Despite these pressures, India shows relative resilience and we have strong domestic institutional domestic flows which cushion the foreign selling as we speak. Growth outlook remains relatively strong and I just want to give a caveat. As of now we have to wait and watch for the monsoon progress to take a full year GDP growth estimation call. On a lighter note, the new definition of EBITDA seems to be earnings before Iran and Trump’s daily announcements. Coming to full year numbers, our Consolidated results for FY26 Operational revenue for the full year stood at 2,439 crores, virtually flat on a year on year basis.
Retail revenues for equities were 1,121 crores which is down 9% majorly due to the impact of regulatory changes announced by SEBI which came into effect in the first quarter of last year and hence we had the full year impact. Institutional and investment banking revenues have increased 11%, 712 crores versus 639 crores. Financial product distribution income has increased by 16% which is now standing at almost 590 crores close to 600 crores. Employee cost we have seen a steep increase in employee cost to 687crores and that is basically a combination of both headcount variable pay provisioning as well as a one time charge of 7 crores due to change in labor laws.
Finance costs have increased 17% to 210 crores because of increased working capital retirement and that is directly linked to the growth in our MTF book depreciation increased 20% on account of investment advances and technology fees and commission expenses increased 8%. That is because of partner payout. Admin expenses are up 9% due to branding and technology. Operational PBT was down 22% and that is basically primarily driven by increase in FY expenses. Other income was about 164 crores. That includes a gain of almost 90 crores on account of sale of real estate which was held in IFL facility, the subsidiary of the holding company.
We also saw NTM due to price movement in BSE shares. Coming to quarter four FY26 versus quarter four FY25 which is a quarter on quarter year on year for the last quarter number Operational revenues was 644 crores versus 537 crores up 20%. Retail revenues was up 22% at 298 crores. Institutional and IB revenues was about 162 crores versus 97 crores and primarily because of both increase in investment banking and broking income. SPD income was 182 crores which is down 4% because last quarter in Q4FY25 we had increased brokerage due to certain transactions on NSE share.
Employee cost increased 12% to 183 crores again because of headcount increase and variable pay increases. Finance cost increased 45%, steep increased to 63 crore because our MTF book increased. Depreciation was up 6% and because of commissioning of a new branch and again technology costs have gone up. Fees and commission expenses are increased by 40% because of sub record sales and admin expenses was 8% increase again due to branding and marketing expenses. Operational PBT before MTM changes have about 14% on a year basis.
If you compare quarter on quarter which is Q4FY26 versus Q3FY26. Operational revenue was up 10%. Retail revenues was up 3% which is virtually flat including institutional broking was virtually flat at about 160 and 162 crores which is virtually unchanged. FPD increase was up 36% 182 crores. Employee cost per flat roughly increased increase of 4% 183 versus 175. Finance cost again increased 18% because of growth in NPF book and working capital requirement. Flat depreciation fees and commission expenses increased because of higher subroc payout.
Admin expense reduced to 86 crores and operational PPT again was up 21% on a quarter on quarter basis. Now coming to some housekeeping Numbers average daily turnover was about 3,22,886 crores which is roughly 3,20,000 crores in F&O and cash was 287.5crores and which was 314660 crores in Q3 and again a split of 3 lakh roughly 12,000 crores in F& O and cash was about 268.5 crores and which is basically 3% growth which is virtually flat. We also as I mentioned earlier we have also started getting into manufacturing.
We launched, we closed our first capital, we closed our Capital Credit Opportunities fund. We raised about 500 crores and this is basically a risk adjusted high yield kind of fund. Coming to income tax notices. I just wanted to give all of you a heads up. The Income Tax Department had been conducted a search under section 132 of the Income Tax act and certain basically what had happened was I think we also from our own side because of the block assessment we had filed ad hoc amount of 27 crores approximately was paid was paid in last quarter.
Now what has happened is that we have got a notice which for roughly for both IFIL management and IFL facilities for roughly about 56 crores combined for the block period from April 1, 2018 to April to February 3, 2025. The restrictive companies are in the process of filing appeal against the said order in case of the holding company. The assessment proceedings are still in progress and we have not got any orders or demand notice till date. We believe after considering all valuable all available facts and records and also consulting with adviser there won’t be any material adverse impact on the financial position of the group and hence we have not made any adjustments.
With this I come to the end of my talk. Thank you so much and we are open to answer any questions that you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question we press star N1 on the touch tone telephone. If you wish to remove yourself from the question queue we need press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembled. First question is on the line of Keshef Karva from White Pine Investment. Please go ahead.
Keshav Kanwa
Thank you for the opportunity. I had two three questions. One is on the underlying growth for SPD Aum which looks strong and what is driving this growth.
R. Venkataraman
See we have seen a growth in our assets because it was about 31,000 crores and it has now become about 52,000 crores and we have seen all round growth both in mutual fund and other assets also and including fixed income assets. Their mutual fund assets have grown from 14,000 to about close to 21,000 crores. So I think basically all products AI, PMS, mutual funds and also fixed income products are seeing some growth.
Keshav Kanwa
Okay sir, so my second question was could you please provide how many RNs you have added this quarter and overall rn count in FY26 and incrementally how many RNs do you plan on adding for FY27 and any target for FY27?
R. Venkataraman
We are currently about 50 well RM and we are close to about 300 odd. 350 on we have about 300 old that affluent or PCG broking RN. Our focus is that we should increase the headcount for wealth rns this year. I don’t have a specific number in mind but we hope because last year has been increasing. Last year had been a difficult year for recruitment but our aim is to add to our wealth the cohort of wealth RL and coming to asset growth. I think we have about, we are close to about 52,000 crores and I don’t have a number in mind but we have to increase it.
Keshav Kanwa
Okay, so my third was that we have seen a sequential decline in the MTS book. What led to the decline and going forward how are you planning to increase the book? Also could you please provide me with a breakup for institutional equities and investment banking revenues for this quarter.
R. Venkataraman
See that? Okay. The basic broad reason for the correct broad reason for the decline of the NPM book is primarily because of the last quarter. Last quarter increased market volatility in the last quarter due to which NPM impact was also there. And coming to the other question about institution working investment banking, roughly I’m giving you a rough number roughly this, this is about, roughly about 700 crores is there and out of it roughly 4. It will be about 450 and 250 between broking and banking.
Keshav Kanwa
Okay sir. And so you are doing a fund
R. Venkataraman
Approximate. So there might be 10 crores up and here and there. Okay.
Keshav Kanwa
Okay sir, so you are doing a fundraiser. So can you throw some light on your plans to use those funds?
R. Venkataraman
See actually you know at this point in time I just want to say that as a company the board continuously evaluates opportunities to enhance shareholder value whether it’s in terms of potential acquisition, new projects and other such combination. So at this point in time I can’t share more with you because there’s no event that requires disclosure as a DLO Dr. Regulation as and when we have something very definitive we will make all appropriate disclosures of the software as per regulatory guidelines.
Keshav Kanwa
Okay sir, thank you so much.
R. Venkataraman
Thank you so much.
Operator
Thank you. Next question is from the line of Prayersh Jain from Motila Loswal. Please go ahead.
Keshav Kanwa
Yeah. Hi sir, how
R. Venkataraman
Are you?
Keshav Kanwa
I’m very good sir. How are you all?
R. Venkataraman
Well
Keshav Kanwa
Just, you know There is this RBI regulations getting implemented from 1st of July, right? What do you see the impact of that on your broking business in any form? And also if you could throw some naive. Not so much for us. How much what would be the kind of impact for the industry per se? See actually you
R. Venkataraman
Know what my view is that there will be a short term impact for sure because of increased working capital requirements and margin requirements and then over a period of time the market finds its own level and goes back to that frame. So short term impact will be there for sure. For us also there will be marginal impact because we don’t do competitive ourselves. So there’s no impact. And so for clients, the clients will have to. I would say the cost of overall trade in Ecuador was increased.
Keshav Kanwa
Okay, got that. And secondly, sir, from 1st of April again on the institutional equity side there has been a reset of yield that has come in because of the Chevy regulations. So what kind of impact do you see on your realizations on the institutional equity side? See
R. Venkataraman
Actually you’re talking about the domestic mutual fund yield, right?
Keshav Kanwa
Yeah, yeah, yeah. So
R. Venkataraman
My opinion is that we. Okay, our opinion or our learning is that the impact will be marginal because already effective yield was plus minus the yield as suggested by the regulator.
Keshav Kanwa
Okay, okay, got it. And secondly sir, when you kind of give that distribution assets is about 52,000 odd crores. This would be, this would include all your customer base today. But you know, is it, would it be appropriate to kind of segregate this into the ultra HNI wealth management that you would be setting up and you are in process of setting up what would be kind of AUM that you would have got from those kind of. See to answer your question about the HNI
R. Venkataraman
Segment which is the new channel which we have set up so roughly we’ll. That will be roughly about 12,000 crores if my memory is correct.
Keshav Kanwa
And the product mix would be similar to what you have shared. Similar. Got that? Got it. Thank you. I’ll come back in the queue if I have more questions. Thanks. Thank you.
Operator
Thank you. Next question is from the line of Nina R. From Quebec Asset Manager. Please go ahead.
Unidentified Participant
Thank you for the opportunity. So my question is on the MTF income. So out of the FY26 income of 439 crores, can you give a split of how much of that is in the interest on. On the NPS book and how much is the interest on deposits of banks?
R. Venkataraman
See roughly income roughly the. It will be roughly 50, 50 50s. 50% is NPM and 50% is from whatever the exchange deposits.
Unidentified Participant
Okay, okay. And so nudging almost into about 18 19%. So what sort of yield do we expect to make on a sustainable basis? I mean how. How do we see that going the net interest margin.
R. Venkataraman
Can you repeat the question please? Your voice is not clear. You’re talking about net interest margin.
Unidentified Participant
Yes sir, the net interest margin I think last year in 25. The total net interest margin for 25 was about 18 19%. So is it lower this year? And how do we see that going on a sustainable basis? What sort of margins are we expecting to do on a sustainable basis?
R. Venkataraman
Net interest margin 18. No, 18 19%. I think the net interest spread is roughly about 4%.
Unidentified Participant
So it’s 173cr of interest on the NPF done last year on last. Last
R. Venkataraman
Year was 200 plus. I thought you trying to calc. You’re trying to deduct interest cost from intersection.
Unidentified Participant
I was talking about the interest earned on the NDX on the margin book. This is about 173 crores. So this is part of the 419 crores of total interest which we did last year.
R. Venkataraman
Last year we had approximately 420 crores of income and the NPF book interest was slightly higher. It will be about 160, 150 times. And the interest expense we paid out was about 180 crores.
Unidentified Participant
But this interest is
R. Venkataraman
Very difficult to attribute. How much of that is attributable to MTEP and how much are the other things? That’s the reason I’m not able to give a precise answer. See how much of this is interest and how much of that is non interest?
Unidentified Participant
Okay, okay. On the distribution income. So sir, our assets have grown but the income has grown relatively higher to 182 crores for the quarter. So is it largely insurance related revenues? Any other products that have also contributed? Because the AUM largely remained the same for us. So what exactly has led to this jump on? Basically
R. Venkataraman
There’s some components of insurance, some components because of placement of NCDs and fixed income. So that’s the reason why we Had a disproportionate increase in last quarter.
Unidentified Participant
Thank you. That’s it. From my side.
R. Venkataraman
Thank you so much. Thank you. Actually, you know, maybe we should meet face to face. So then I’ll be able to answer your other question on interest correctly. Because you know I’m not able to hear you. Maybe it’s better. I think we can.
Unidentified Participant
I’ll connect with you. That’s helpful. I’ll definitely connect with
Operator
You for this. Thank
R. Venkataraman
You so much.
Unidentified Participant
Thank
Operator
You. Thank you. Next question is from the line of Apeksha Bajaj from AV Fincorp Private limited. Please go ahead.
Unidentified Participant
Yeah. Hi. Thank you for the opportunity. Any color on further acquisition by Fairfax? There was a news around that it is going to increase stake by 10%.
R. Venkataraman
I can’t offer any comments on this.
Unidentified Participant
Thank you.
R. Venkataraman
So as and when there is something definitive we’ll surely make appropriate disclosures as per listing guidelines to the exchanges.
Unidentified Participant
Okay. Thank you.
R. Venkataraman
Thank you.
Operator
Thank you. Next question is from the line of Abhijit Sakare from Kotak Securities. Please go ahead.
Keshav Kanwa
Good afternoon, sir. Thanks for taking my question. Sir, a slightly hypothetical question. Looking at our network of close to 3000 crores. How do you see it in terms of supporting our growth ambitions over the next three years on the broking side and potentially on the wealth management side as well?
R. Venkataraman
Actually we think that we are well capitalized and we have enough drive power to grow. So I don’t know how to answer your question. Because we are profitable. Last three years, last four years. I think our network has gone from. And basically all of it. So I think we are running a profitable franchise and we have enough. All the cash has been used to reinvest in the business. So we think that we have enough ammunition to grow.
Keshav Kanwa
Understood, sir. Sir, initially you had given a comment around the. In terms of the breakup between IB and IE revenues that was I think close to about 700 crore. That was for the full year. FY26. Right. Just reconfirming that.
R. Venkataraman
Yes, yes, yes, it was correct. The full year revenue was about 712 crores.
Keshav Kanwa
Understood. Okay, that makes sense. Got it. Sir, that will be all. Thank you so much.
R. Venkataraman
Thank you so much.
Operator
Thank you. Next question is from the line of players. Jane from Motilal Oswal. Please go ahead.
Keshav Kanwa
So just an extension of the previous question. The current network of 3000 odd crores, how is that utilized across a broking wealth management and you know, alternates that you’re setting up that would also need seed funds. So how has been the utilization of this network currently across the business lines.
R. Venkataraman
Actually the bulk of the business has been put in broking, MTF and exchange margin. So that has been a big allocation of capital.
Keshav Kanwa
So with this current network and the borrowing limits that we can still have, do you think that we have enough capital or headroom to grow another 20% in the next couple of years or we would need more capital?
R. Venkataraman
I think we have enough to grow in the next 20% in the next.
Keshav Kanwa
Got that, Got that. And Sabrina, with respect to the, you know any plans on new other categories like full fledged AMC or any plans there, any thoughts with respect to new products categories that we want to get onto?
R. Venkataraman
I think as of now we think that we have all the elements that can help us to succeed in our businesses which is investment banking, insurance, equity and I would say wealth management. As you know in the earlier in the slide also we have said that we have started manufacturing in house manufacturing both on the TMS platform and the AIF platform including early stage, late stage as well as credit fund. We will evaluate opportunity to enhance sharing the value and to competitive positioning. So as and when something happens we’ll make all the necessary declaration.
Keshav Kanwa
Got that sir. Thank you.
R. Venkataraman
Thank you so much.
Operator
Thank you. A reminder to all the participants, anyone who wishes to ask a question, please press star N1. Participants, you may please press STAR and one to ask a question
R. Venkataraman
For joining us on the call. Thank you so much and. Should you have any further questions, please feel free to reach out to either me or and we’ll be more than glad to answer all your questions. Thank you so much and have a nice day.
Operator
Thank you very much on behalf of IFL Capital Services limited that concludes this conference. Thank you all for joining us today and you may now disconnect your lines.
R. Venkataraman
Thank you.