Indian Railway Finance Corporation Ltd (IRFC) Q2 FY27 Results Analysis: Revenue Jumps 23%, Margin Compresses 373 bps
Indian Railway Finance Corporation Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 7,866.41 Cr (+23.45% YoY) and PAT growth of +10.21% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 15, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 7,866.41 Cr (+23.45% YoY) |
| PAT (Q2) | Rs. 1,958.48 Cr (+10.21% YoY) |
| EBITDA margin | 24.16% (-373 bps YoY) |
| EPS (Q2) | Rs. 1.50 (+10.29% YoY) |
| Market cap | Rs. 103,672.43 Cr |
| CMP | Rs. 79.33 |
Quarter Snapshot
IRFC's Q2 FY27 revenue grew 23.45% YoY to Rs.7,866.41 Cr, accelerating from Q1, as lease income more than doubled to Rs.7,148.53 Cr following completion of EBR moratorium periods in March 2026. PAT rose 10.21% YoY to Rs.1,958.48 Cr, in line with management's double-digit guidance, but operating margin compressed 373 bps YoY to 24.16% as finance costs grew 30.21% YoY, and NIM improved only 2 bps QoQ to 1.50% against the FY27 target of 1.65%. A record interim dividend of Rs.1.15 per share was declared, while SEBI LODR board-composition non-compliance persisted through 30 Sep 2026 with exchange fines received and a waiver pending.
Key Investment Insights
Key Positives
- Revenue grew 23.45% YoY to Rs.7,866.41 Cr, accelerating from 19.5% YoY growth in Q1 FY27
- Lease income more than doubled YoY to Rs.7,148.53 Cr (+101.78%) after moratorium periods for EBR IF 2019-20, EBR-IF 2020-21 and EBR-S 2020-21 completed in March 2026
- PAT grew 10.21% YoY to Rs.1,958.48 Cr, in line with management's double-digit guidance; H1 PAT up 10.31% YoY
- NIM improved to 1.50% in Q2 from 1.48% in Q1, narrowing the gap to the FY27 target of 1.65% to 15 bps
- Zero NPA maintained and AAA/Stable ratings retained from CRISIL, ICRA and CARE
- Interim dividend of Rs.1.15 per share declared (payout Rs.1,502.88 Cr), the highest single-tranche dividend in company history
- Net worth reached a record Rs.60,573.35 Cr (+7.79% YoY) and debt-equity improved to 7.12x from 7.69x at March 2026
- H1 operating cash flow of Rs.37,212.48 Cr, up 115.3% YoY; cash and equivalents of Rs.29,946.38 Cr at 30 Sep 2026
Risk Factors
- Operating profit margin compressed 373 bps YoY to 24.16% as finance costs grew 30.21% YoY, outpacing revenue growth of 23.45%
- Finance costs consumed 74.67% of total income vs 71.32% a year ago; management cites hard bond market and competitive pricing pressure
- SEBI LODR board-composition non-compliance persisted as of 30 Sep 2026 despite two independent director appointments in August; exchange fines of Rs.13,72,340 per exchange received for Q1 FY27 with waiver pending
- GST show-cause notices of Rs.549.32 Cr (Delhi, FY23) and Rs.396.91 Cr (Hajipur) remain unresolved with no provision booked in P&L
- Interest income fell 74.63% YoY to Rs.717.88 Cr as railway loan portfolios transitioned to the lease model
- OCI was negative Rs.177.08 Cr in Q2 from fair-value changes in foreign-currency borrowings and hedging instruments, pulling total comprehensive income to Rs.1,781.40 Cr vs PAT of Rs.1,958.48 Cr
Ask about this
Ask Cofacto a question about this result. Answers cite filings and company data.
Related
Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.