IndoStar Capital Finance Limited has informed the Exchange about Transcript for the Investor Call held on August 14, 2025
INDOSTAR · price
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IndoStar Capital Finance reported Q1 FY26 results after selling its 100% subsidiary Niwas Housing Finance, booking a one-time gain of INR1,176 crores (INR1,007 crores post-tax). Standalone net profit surged to INR535 crores from INR12 crores in the previous quarter, driven primarily by this exceptional gain. AUM grew 9% year-on-year to INR7,783 crores, though disbursements declined to INR858 crores from INR1,081 crores in Q4 due to tightened credit policies. NIM improved from 6% to 6.2%, with yield on loans at 16.8%. The company replaced INR870 crores of high-cost legacy debt (~12%) with fresh borrowings at ~9.5%, saving about INR21 crores annually, and plans to replace another INR1,480 crores over the next 3 quarters. Management guided for 15% sequential growth in Q2 disbursements and AUM growth of 12-15% in FY26 and 15-17% in FY27. Gross Stage 3 stood at 4.04% and net Stage 3 at 1.68%, with capital adequacy at a strong 32.7%.
Shareholders benefit from a cleaner, focused NBFC with strong capital position (32.7% CRAR) and a clear roadmap to reduce borrowing costs by replacing high-cost debt. The one-time subsidiary sale gain boosts near-term profitability, while the AUM growth guidance of 12-17% over the next two years signals steady expansion. The cost-to-income ratio target of 50% over a few years and ongoing margin expansion through lower cost of funds are positive long-term signals, though near-term disbursement softness reflects a deliberate shift toward higher credit quality customers.