IndoStar Capital Finance Limited Q4FY26 Disbursements ₹1,306 crore up 17% vis-à-vis Q3FY26 and 21% vis-à-vis Q4FY25

Q4FY26 PPOP ₹ 93 crore up 10% vis-à-vis Q3FY26 and 51 % vis-à-vis Q4FY25.
AUM as of March 31, 2026 stood at ₹ 8,056 crore.

MUMBAI, India, May 28, 2026 /PRNewswire/ -- IndoStar Capital Finance (BSE: 541336) (NSE: INDOSTAR) (ISIN: INE896L01010) (CIN: L65100MH2009PLC268160), 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, on May 27^th, 2026.

IndoStar is a retail NBFC focused on secured lending across Vehicle Finance (VF) and Micro Loans Against Property (M-LAP), targeting the credit needs of underserved segments.

Operational and Financial highlights:

Disbursements for the quarter stood at INR 1,306 crore, reflecting a strong 17% sequential growth over Q3FY26 and 21% growth over Q4FY25.

Assets Under Management (AUM) stood at ₹8,056 crore as of March 31, 2026, registering a 5% increase compared to the previous quarter, supported by growth across both Vehicle Finance and M-LAP segments.

On a standalone basis, Net Interest Income grew by 3% QoQ and 20% YoY, supported by a continued reduction in borrowing costs.

Pre-provision operating profit (PPOP) stood at INR 93 crore, reflecting a growth of 10% QoQ and 51% YoY, driven by improved operating efficiencies.

Over the last few quarters, the company has also witnessed a steady improvement in its borrowing profile, with 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 remains stable with Gross Stage 3 assets at 4.77% and Net Stage 3 assets at 2.09% as at March 31, 2026.

Security Receipts and Provisioning

As a decisive step towards completing its initiative to de-risk the balance sheet from potential future volatility arising from the legacy portfolio of Security Receipts (SRs), the Company made an additional provision of ₹326.13 crore against this portfolio.

As of March 31, 2026, the gross carrying value of SRs stood at ₹1,607.78 crore while the net carrying value reduced to ₹588.63 crore from ₹1,022.60 crore as of March 31, 2025. The provision coverage ratio on SRs increased to 63%, compared to 26% a year ago.

The Company maintains strong visibility on recoveries from its SR portfolio, with the current net carrying value of approximately ₹588.63 crore expected to be realized in due course.

Macroeconomic Developments and Management Overlay

During the quarter, geopolitical developments in West Asia introduced heightened macroeconomic uncertainties, particularly through volatility in energy prices and potential supply chain disruptions. Given the evolving nature of these developments and the limited availability of reliable data, the full impact is not yet captured within the Expected Credit Loss (ECL) framework.

As a prudent measure, the management has undertaken a qualitative assessment of potentially exposed portfolios and recognized an additional management overlay of ₹49.00 crore during the quarter. The Company will continue to closely monitor external developments and reassess the adequacy of this overlay in subsequent reporting periods.

Strategic Initiatives: 

IndoStar continued to make progress on its key strategic priorities:

• Technology Transformation:
  • Strengthened data science capabilities across sourcing, underwriting, collections, and fraud intelligence. Automated scorecard-based approvals for Cars and Small CVs are now operational, with 44% of disbursements executed through straight-through processing and bounce rates reducing by 15% in last quarter. Scorecard coverage is expected to expand to nearly 70% by March 2027.
  • The Company also rolled out E-application, E-agreement, and E-NACH, improving onboarding efficiency and significantly reducing paperwork.
  • In May 2026, the Company received approval to undertake Aadhaar-based authentication (e-KYC), which is expected to further accelerate its digitalization initiatives and enhance customer onboarding efficiency
• Branch Expansion:
  • IndoStar now operates through 454 branches across 24 states and union territories, strengthening its distribution reach across India.
  • The Micro LAP business continues to leverage the existing Vehicle Finance branch network, driving cost efficiency and market penetration. The branch count increased from 91 in Q3FY26 to 108 in Q4FY26, with a strong presence across Andhra Pradesh, Gujarat, Tamil Nadu, and Telangana, and since these branches are co-housed with existing CV branches, this expansion involved no incremental infrastructure cost.
• Talent Onboarding and Leadership Strengthening:
  • During the quarter, the Company continued to strengthen its leadership team through the onboarding of key senior professionals across critical functions, reinforcing its growth strategy.
  • The Company onboarded a Head – Analytics to enhance data-driven decision-making and drive portfolio quality and productivity improvements.
  • To further scale its business, the Company appointed National Sales Managers across key segments, including Farm Equipment, Construction Equipment, and Micro LAP, aimed at accelerating business expansion and deepening market penetration.
  • These strategic hires are expected to bolster sales execution, improve customer acquisition, portfolio quality and support the Company's continued focus on scalable, sustainable and profitable growth.

Key Performance Highlights (ICF Standalone):