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IIFL Finance Ltd
IIFL Finance Climbs 3% Is This NBFC Poised for a 35% Upside ?
IIFL Finance shares gained over 3% after DAM Capital projected up to 35% upside, citing the company's strong positioning in the gold loan segment, improving asset quality, and robust earnings outlook. The optimism is further supported by a sharp jump in quarterly profits and a successful $500 million international bond issuance.
Investor sentiment received a boost after DAM Capital initiated a positive view on IIFL Finance, highlighting its extensive gold loan franchise and nationwide branch network. The brokerage believes the company is well-positioned to gain market share from unorganized lenders, especially as regulatory oversight and customer preferences increasingly favor established NBFCs. DAM Capital expects IIFL Finance to deliver some of the strongest earnings growth among its peers over the next two years and sees potential upside of up to 35% from current levels.
The company's financial performance has also strengthened considerably. For Q4 FY26, IIFL Finance reported a consolidated net profit of ₹623 crore, more than double the ₹251 crore reported in the corresponding period last year. Total income rose to ₹3,700 crore from ₹2,594 crore, supported by higher lending activity and rising interest income. Equally important, asset quality improved meaningfully, with gross NPAs declining to 1.46% from 2.2% a year earlier and net NPAs reducing to 0.73% from 1.0%.
Beyond its gold loan business, the company has built a diversified lending portfolio with housing finance forming a significant portion of its non-gold book. This diversification reduces dependence on a single segment and provides stability across economic cycles. Following a period of consolidation, analysts expect both loan growth and profitability to accelerate, supported by healthy demand across retail lending categories.
Adding another positive catalyst, IIFL Finance successfully raised $500 million through an international social bond issue. The 3.25-year bond was priced at 7.6% and attracted orders worth nearly $2 billion from global institutional investors, demonstrating strong confidence in the company's credit profile. The proceeds will be deployed towards lending to MSMEs, gold loan customers, and other economically weaker sections, supporting both growth and financial inclusion objectives.
The recent stock rally reflects growing confidence in IIFL Finance's ability to combine strong earnings growth with improving asset quality. With a dominant gold loan franchise, a diversified lending portfolio, fresh access to global capital, and favorable brokerage outlooks, investors are increasingly viewing the company as one of the stronger growth stories in India's NBFC sector.
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