Indian Railway Finance Corporation (IRFC) Q2 24/25 earnings summary

Executive summary

• New CMD with extensive railway and finance experience is leading diversification beyond railways into logistics and infrastructure, while maintaining a primary focus on railway financing with 99.03% of AUM exposed to the Ministry of Railways.

• AUM reached INR 4,62,282.60 crore as of September 30, 2024, with net worth at INR 51,464.12 crore.

• Profit after tax for HY1 FY25 was INR 3,189.47 crore, up 3.02% year-over-year, and revenue from operations grew to INR 13,664.97 crore.

• No new disbursements in the last six quarters, but revenue remains steady due to ongoing projects with moratorium periods.

• Recent deal with NTPC marks the start of non-railway leasing business, with a 15-year lease model and higher margins than core railway business.

Financial highlights

• Assets under management exceeded INR 4.62 lakh crore as of September 30, 2024, with average annual disbursements of over INR 60,000 crore from FY18 to FY23.

• FY21 saw a record disbursement of over INR 1 lakh crore, the highest for any NBFC in a single year.

• Net interest income for HY1 FY25 was INR 3,224.32 crore, a 4.37% increase year-over-year.

• Operating expenses remain negligible, at 0.09% of total income.

• Earnings per share for HY1 FY25 was INR 2.44.

Outlook and guidance

• Management is preparing for renewed lending, targeting not just railways but also logistics and infrastructure sectors.

• Board approved financing of 20 BOBR rakes to NTPC for up to INR 700 crore.

• Entered MoUs with RITES and IIFCL for strategic collaboration.

• No specific growth or disbursement targets provided; clarity on government business expected in January and February with budget announcements.

• Anticipates significant growth in non-railway business, with margins expected to be higher than traditional railway lending.