IFCI Ltd Q2 FY26 – The Vintage Banker Turned Recovery Agent Who’s Trying to Shine Again (But the Lights Keep Flickering)
1. At a Glance
Once the grand financier of India’s industrial dreams, IFCI Ltd now resembles that one retired uncle who still wears a tie to family dinners and insists he’s “still in business.” At ₹54.7 a share and a market cap of ₹14,743 crore, this government-owned NBFC has spent 77 years lending to airports, roads, power plants, and more recently—to its own patience.
For Q2 FY26, revenue hit ₹732 crore, up 18.7% YoY, while PAT zoomed 71.8% YoY to ₹143 crore. Impressive, except for one tiny footnote: Gross NPAs are still ₹3,597 crore, and CRAR is sitting at a cool –21.32%, meaning technically, IFCI’s capital adequacy ratio is having an existential crisis.
The Government of India just infused ₹500 crore through fresh equity allotment, keeping the ventilator running. The new CFO, Chirag Sapra, has the unenviable job of turning a legacy lender into a sustainable advisory house.
As the Bible says, “Faith without works is dead.” IFCI seems to have found the faith (thanks to GoI), now all it needs is the works (thanks to actual lending).
2. Introduction
If you ever wanted to see the financial equivalent of a once-famous Bollywood actor doing cameos in government-backed remakes — look no further than IFCI.
Founded in 1948 as the Industrial Finance Corporation of India, this institution once wrote the cheques that built India’s first power plants, ports, and telecom lines. Now it mostly writes press releases about recoveries and advisory assignments.
After decades of lending sprees and industrial heartbreaks, IFCI looks more like a rehab clinic for bad loans than a financier. Between FY21 and FY23, its gross NPAs dropped from ₹8,009 crore to ₹5,835 crore — improvement, yes, but still the kind of number that makes rating agencies reach for their inhalers.
To its credit, the company has pivoted — fewer loans, more advisory. The new business model focuses on corporate finance, syndication, and ESG advisory. The FY23 recovery figure of ₹714 crore may not sound like much, but for a company that stopped disbursing new loans for two years, that’s practically a comeback tour.
Yet, IFCI’s Q2 FY26 results show flickers of life — profits returning, debt slashed to ₹3,507 crore, and government equity infusions that keep the lights on. Whether this old lion can roar again or just purr into a PSU sunset — that’s the story.
3. Business Model – WTF Do They Even Do?
Picture a bank, but one that doesn’t take deposits, doesn’t really lend anymore, and spends a lot of time recovering from its past. That’s IFCI.
Its revenue mix tells the tale:
Interest Income – 18% (from old project loans still limping on)
Dividend Income – 23% (from stakes in old investments like ICRA, NSE, etc.)
Fee & Commission – 27% (advisory work for corporates and government)
Services – 23% (everything else that makes it sound like a fintech, but isn’t)
The company’s major business arms:
Project Finance: Once funded airports, highways, and power projects — including Adani Mundra Port and GMR Goa Airport. These days, it funds mostly memories.
Corporate Finance: Loans against shares, balance sheet funding, lease rental discounting, and capital expenditure.
Advisory & Syndication: The only segment currently breathing — 31 advisory mandates bagged in FY23.
Structured Products & ESG: Offers “innovative” structured debt — which in simple terms, is debt with a bowtie.
So, if IRFC is the suave corporate banker, and REC is the steady PSU lender, IFCI is that old accountant who now teaches “financial prudence” after losing half his portfolio.
4. Financials Overview
Source table
Metric
Q2 FY26 (Sep 2025)
Q2 FY25 (Sep 2024)
Q1 FY26 (Jun 2025)
YoY %
QoQ %
Revenue
732
617
407
18.7%
79.9%
EBITDA
489
265
193
84.5%
153.4%
PAT
143
83
62
71.8%
130.6%
EPS (₹)
0.53
0.32
0.15
65.6%
253%
Commentary: Profit has surged thanks to better recoveries, lower provisioning, and fewer write-offs. For a company that’s spent years in red ink, these are green shoots — or maybe just green accounting. Either way, the lights are back on.
5. Valuation Discussion – Fair Value Range Only
Let’s play valuation, the favorite game of hopeful PSUs:
Method 1: P/E Based
EPS (TTM): ₹1.41
P/E Range: 25x–40x (since peers like HUDCO & TFCI trade 15–30x) → Fair Value = ₹35 – ₹56
Method 2: EV/EBITDA
EV: ₹14,324 Cr
EBITDA: ₹1,480 Cr (approx. annualized) → EV/EBITDA ≈ 9.7x If fair range is 8–10x → Fair Value = ₹50 – ₹62
Method 3: Price/Book
Book Value = ₹32.9
P/B Range: 1.5x–2x → Fair Value = ₹49 – ₹66
📊 Educational Fair Value Range: ₹49 – ₹62 per share Disclaimer: This range is for educational use only, not investment advice.
6. What’s Cooking – News, Triggers, Drama
November 2025 was peak IFCI drama — think corporate Bigg Boss with fewer viewers but more government intervention.
Capital Injection: The Government of India infused ₹500 crore through preferential allotment on Feb 28, 2025. This keeps CRAR alive and net worth stable.
Leadership Change: New CFO Chirag Sapra joined on Nov 11, 2025, replacing veteran Suneet Shukla. A fresh face to manage old loans.
Ratings Saga: Brickwork reaffirmed ratings at BWR B+ (Negative) for NCDs and A4 for CPs. That’s the corporate version of “doing okay but
