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Informist, Friday, Jul. 31, 2026

 

--IRFC: Expect pick up in disbursements for rest of FY27

--CONTEXT: Comments by IRFC's management in post-earnings anayst call 
--IRFC: Expect NIM to be at 1.6% in FY27 
--IRFC: To foray into high-speed rail projects in near term 

 

By Vaishali Tyagi and Janwee Prajapati

 

NEW DELHI/MUMBAI – Indian Railway Finance Corp. Ltd. expects its net interest margin to be 1.6% in 2026-27 (Apr-Mar), the railway financier said in an analyst call on Friday post its earnings. IRFC expects the net interest margin to improve as the asset mix shifts in favour of higher-yielding assets, and aims to achieve a net interest margin of 2% by the end of 2030. 

 

"So, what we saw last year is our NIM growing to 1.50% for the whole of FY26...this year we are looking forward to NIM growing and by the end of the year when we add more of high yielding assets in my AUM (asset under management), we intend to end up more than 1.60%. This is what we are looking forward to," the management said.

In the March quarter, the company had for the net interest margin to touch 1.65% in FY27. The management said the company was working towards that aim and the improvement would be visible by Jan-Mar as the company would reduce low-yield business and increase the share of high-margin assets. The company's annualised net interest margin was 1.48% for the June quarter. 

 

The company detailed its June quarter results during market hours Thursday. For the June quarter, the company reported a rise in net profit due to higher total income, driven by an increase in revenue from operations and other income. The public sector company reported a net profit of INR 19.27 billion for the quarter, up over 10% on year. On a sequential basis, the net profit rose over 14%, the strongest quarter-on-quarter growth in 12 quarters. At 1219 IST, shares of the company traded at INR 89.48 on National Stock Exchange, up nearly 1% from Thursday. 

 

IRFC is in the process of formulating a plan for over INR 500 billion of disbursements over the next decade. The company said its guidance given last year remains intact. The management said Apr-Jun is typically a slower quarter for disbursements, but these are expected to pick up in the rest of this financial year. "...we are sure that we'll be doing what we did last year or even better than that," the management said. "Q1 is always sluggish and slow for the kind of disbursement because we don't have a very big pipeline right now. So, yes, we are looking forward to refinancing assets also in the future in this fiscal year itself. So, as I said, Q2, Q3, Q4, disbursement will pick up."

 

On AUM, the public sector undertaking reiterated its guidance of reaching INR 5 trillion in AUM by the end of FY27, backed by a strong pipeline of projects, the management said. The company said it plans to expand financing across high-speed and dedicated freight corridors, metro rail, rapid rail, major and minor ports, transport infrastructure, and railway-linked renewable energy projects. "We are trying to bring out a kind of financial solutions which are not regular and typical in the market," the management said. "We are looking forward to create something bespoke for plant-to-plant. And yes, Hyderabad metro is right on track." The company's assets under management were INR 4.79 trillion as of the end of June, down from INR 4.85 trillion as of Mar. 31.

 

On Hyderabad Metro, IRFC said it has an agreement for refinancing Phase-1, which has been operational for the last 10 years. The company is also in discussions for Phase-2, which involves nearly 200 kilometres of lines with an estimated project cost of around INR 400 billion. While the funding size for Hyderabad Metro could increase, IRFC said that its focus was not limited to one project and that it was looking to provide financing solutions to metros and rapid rail systems across the country, both existing and upcoming.

 

Citing urbanisation trends, the officials said demand for metro and rapid rail was set to rise sharply as part of the government's Smart City push. Over 60% of India's population is expected to live in urban areas by 2047, it added. IRFC also said it is exploring opportunities in the high-speed rail corridor.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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