IndoStar Capital Finance Reports Q4 FY26 Results, Sees 21% Growth in Disbursements
Mumbai, May 28, 2026: IndoStar Capital Finance Limited, a middle-layer non-banking finance company (NBFC) registered with the Reserve Bank of India, announced its financial results for the quarter and the year ended March 31, 2026. The NBFC specializes in retail lending, focusing on secured financing across Vehicle Finance (VF) and Micro Loans Against Property (M-LAP) to meet the credit needs of underserved segments.Quarterly Financial Highlights
The company reported a strong performance for the quarter ended March 31, 2026. Disbursements for the quarter stood at INR 1,306 crore. This figure reflects significant growth, showing a 17% sequential increase compared to Q3FY26 and 21% growth compared to Q4FY25.Key performance metrics also demonstrated robust growth:
- Pre-provision operating profit (PPOP) reached INR 93 crore, marking a 10% increase quarter over quarter and a 51% increase year over year.
- Assets Under Management (AUM) as of March 31, 2026, stood at ₹8,056 crore, indicating a 5% increase from the previous quarter, supported by growth across both the Vehicle Finance and M-LAP segments.
- On a standalone basis, Net Interest Income grew by 3% Quarter-over-Quarter (QoQ) and 20% Year-over-Year (YoY).
Furthermore, the company noted a continuous improvement in its funding profile, with the weighted average cost of funds declining to 10.2% in Q4 FY26 from 11.0% in Q4 FY25, representing an improvement of 80 basis points. The company’s asset quality remained stable, with Gross Stage 3 assets recorded at 4.77% and Net Stage 3 assets at 2.09% as of March 31, 2026.
Risk Management and Security Receipts
Addressing potential future volatility, the company took steps to de-risk its balance sheet concerning the legacy portfolio of Security Receipts (SRs). IndoStar made an additional provision of ₹326.13 crore against this portfolio.As of March 31, 2026, the gross carrying value of SRs was ₹1,607.78 crore. The net carrying value was reduced to ₹588.63 crore from ₹1,022.60 crore as of March 31, 2025. The corresponding provision coverage ratio on SRs increased to 63%, a considerable rise from 26% the previous year.
Management Overlay and Macroeconomic Outlook
In response to geopolitical developments in West Asia, which introduced heightened macroeconomic uncertainties, the management undertook a qualitative assessment of potentially exposed portfolios. As a prudent measure, an additional management overlay of ₹49.00 crore was recognized during the quarter.Strategic Growth and Operations
IndoStar continued to advance several strategic priorities to drive business expansion:Technology Transformation
The company strengthened its data science capabilities across sourcing, underwriting, collections, and fraud intelligence. Automated scorecard-based approvals for Cars and Small CVs are now operational, contributing to 44% of disbursements being executed through straight-through processing and achieving a 15% reduction in bounce rates in the last quarter. The company expects scorecard coverage to expand to nearly 70% by March 2027. Efficiency was further boosted with the rollout of E-application, E-agreement, and E-NACH. In May 2026, the company also received approval to undertake Aadhaar-based authentication (e-KYC).
Branch Expansion
IndoStar now operates through 454 branches spanning 24 states and union territories, bolstering its distribution reach. The Micro LAP business leveraged the existing Vehicle Finance branch network, increasing the branch count from 91 in Q3FY26 to 108 in Q4FY26. This expansion, particularly strong across Andhra Pradesh, Gujarat, Tamil Nadu, and Telangana, involved no incremental infrastructure cost as these branches were co-housed with existing CV branches.
Leadership and Market Penetration
The company focused on enhancing its leadership team, onboarding key senior professionals across critical functions. A Head - Analytics was appointed to improve data-driven decision-making. To deepen market penetration and accelerate business expansion, National Sales Managers were also appointed across key segments, including Farm Equipment, Construction Equipment, and Micro LAP.
Key Performance Highlights (ICF Standalone)
The following table details the comparative performance metrics:| Particulars ( ₹ in crore) | FY26 | FY25 | Y-o-Y% | Q4 FY26 | Q4 FY25 | Y-o-Y% | Q3 FY26 | Q-o-Q % |
|---|---|---|---|---|---|---|---|---|
| Net Interest Income | 771.7 | 663.1 | 16.4% | 214.7 | 179.2 | 19.8% | 209.2 | 2.6% |
| Operating expense | 506.0 | 481.5 | 5.1% | 121.5 | 119.5 | 1.7% | 124.2 | -2.1% |
| Pre-provision operating profit | 266.5 | 190.1 | 40.2% | 93.3 | 61.8 | 51.0% | 85.2 | 9.6% |
| Profit/(loss) after tax | 130.2 | 52.6 | (424.0) | 12.4 | 8.3 | |||
| CAR (%) Standalone | 36.1% | 28.5% | 36.1% | 28.5% | 41.4% | |||
| Leverage (D/E) | 1.45 | 2.03 | 1.45 | 2.03 | 1.23 |
INDOSTAR Stock Price Movement
On Wednesday, IndoStar Capital Finance Limited shares gained momentum, closing at ₹230.25 after rallying 11.47% for the session. The stock saw robust trading activity, with over 1.09 million shares transacting throughout the day.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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