Company Overview
Indian Railway Finance Corporation (IRFC), incorporated in 1986, serves as the dedicated financing arm of the Indian Railways. The company raises funds from domestic and international capital markets to finance the acquisition and creation of railway assets, which are then leased to Indian Railways under long-term finance lease agreements. IRFC plays a vital role in supporting India’s railway infrastructure expansion and modernization programs. Presenting below its Q2 FY26 Earnings Results.
Q2 FY26 Earnings Results
IRFC reported revenues of ₹6,918 crore, reflecting a 2.2% year-on-year increase compared to ₹6,766 crore in Q1 FY25. Total expenses stood at ₹4,634 crore, down 12.4% YoY, aided by lower borrowing costs and optimized funding strategies. The company posted its highest-ever quarterly profit, with net profit rising 10.7% YoY to ₹1,746 crore from ₹1,577 crore in the previous year. Earnings per share (EPS) improved to ₹1.36, representing a 10.57% increase.
Operational & Strategic Update
- Record Financial Performance: Q2 FY26 marked IRFC’s strongest quarter to date, backed by efficient cost control and higher net interest margins (NIM) of 1.53%, the highest in three years.
- Loan Portfolio & Asset Growth: IRFC’s loan book and total assets expanded in line with Indian Railways’ capital expenditure programs. The company continues to finance rolling stock, infrastructure, and new-age projects under the Railways’ modernization drive.
- Diversification: Under its “IRFC 2.0” initiative, the firm is exploring diversification into financing high-margin infrastructure projects such as metro rail, renewable energy, and logistics parks, beyond traditional railway assets.
- Net Worth & Stability: Net worth grew 7.2% YoY to ₹54,423 crore, while asset quality remained pristine with zero NPAs. The company’s strategic focus on maintaining a balanced maturity profile and cost-effective borrowings continues to strengthen its financial position.
Outlook
IRFC remains well-poised to continue as a cornerstone financier for national railway infrastructure development. With strong credit ratings, stable interest margins, and diversification into new financing avenues, the company aims to maintain steady growth and profitability in FY26 and beyond. Management has guided for a minimum loan disbursement target of ₹30,000 crore for FY26, supported by favorable government spending on transport infrastructure.
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