IndoStar Capital Finance Limited reported a net profit of ₹13,020 lakh for the financial year ended March 31, 2026, compared to ₹5,259 lakh in the previous year, driven by exceptional gains from the divestment of a subsidiary. The company has set a strategic target to achieve a 35% compound annual growth rate (CAGR) in disbursements and aims for a profit after tax of ₹450 crore to ₹500 crore by FY29. This guidance was provided during the analyst call held on May 28, 2026, where management outlined a three-year framework focused on high-quality growth and portfolio quality.

Operational and Financial Highlights

Assets Under Management (AUM) stood at ₹8,056 crore as of March 31, 2026, registering a 5% increase compared to the previous quarter. Disbursements for Q4FY26 stood at ₹1,306 crore, reflecting a 17% sequential growth over Q3FY26 and 21% growth over Q4FY25. The weighted average cost of funds declined to 10.2% in Q4FY26 from 11.0% in Q4FY25, an improvement of 80 basis points. The company noted that April and expected May disbursements are tracking a robust 40% year-on-year growth.

Financial Performance

The company recorded an exceptional gain of ₹1,17,595 lakh during the year from the sale of its shareholding in Niwas Housing Finance Limited. For the quarter ended March 31, 2026, the company reported a net loss of ₹42,396 lakh, compared to a net profit of ₹124 million in the same quarter of the previous year. This quarterly loss was primarily due to an impairment of ₹51,727 lakh on financial instruments and an additional management overlay of ₹4,900 lakh related to the regional crisis in West Asia. Q4 revenue stood at ₹3.5 billion, compared to ₹3.7 billion in the same quarter of the previous year. Total income for the year stood at ₹1,39,359 lakh, while total expenses were ₹2,27,034 lakh.

Asset Quality and Provisions

The Gross Non-Performing Assets (GNPA) ratio stood at 4.77% as of March 31, 2026, compared to 4.52% in the previous year. The Net Non-Performing Assets (NNPA) ratio improved to 2.09% from 2.46%. The Provision Coverage Ratio (PCR) on NPAs increased to 57.40% from 46.65% in the prior year. The company made an additional provision of ₹326.13 crore against Security Receipts (SRs), increasing the provision coverage ratio on SRs to 63% from 26% a year ago. Management indicated that the old book is running off fast and expects asset quality to stabilize between 3.75% and 4%.

Strategic Initiatives

IndoStar Capital Finance strengthened its data science capabilities, with 44% of disbursements executed through straight-through processing. The branch network expanded to 454 across 24 states, with Micro LAP branches increasing to 108. The company received approval in May 2026 to undertake Aadhaar-based authentication (e-KYC) to enhance digital onboarding. Management highlighted a strategic pivot towards a high-growth, portfolio quality-focused framework, with diversification reducing MHCV disbursements from 57% in FY24 to 31% in FY26.

Regulatory Disclosures

The Board approved the Security Cover Certificate for listed non-convertible debentures aggregating to ₹2,88,489.51 lakh as of March 31, 2026. The company confirmed compliance with all financial covenants for its listed debt securities. The trading window for designated persons and their immediate relatives will open on June 1, 2026.

IndoStar Capital Finance Limited approved amendments to its Code of practices and procedures for fair disclosure of unpublished price sensitive information (UPSI) on May 27, 2026. The Board of Directors approved the changes to ensure compliance with Regulations 8(1) and 8(2) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The updated Code, designated as Version 5, outlines the principles for fair, timely, and adequate disclosure of information that could materially affect the price of the company's securities.

The Code defines UPSI as any information relating to the company or its securities that is not generally available and includes financial results, dividends, changes in capital structure, mergers, acquisitions, and key managerial personnel changes. It mandates that the company ensure prompt public disclosure of such information to avoid selective dissemination and maintain uniformity. The Compliance Officer will act as the Chief Investor Relations Officer to oversee the dissemination process.

Principles for Disclosure

The company will make public disclosures only after taking concrete or definitive decisions, ensuring no information is shared during pending negotiations or when awaiting statutory approvals. The policy emphasizes handling UPSI on a need-to-know basis and prohibits sharing with any person except for legitimate purposes, performance of duties, or discharge of legal obligations. The company will also maintain records of proceedings of meetings with analysts on its official website.

Structured Digital Database

A Structured Digital Database will be maintained to record the nature of UPSI, the names of individuals sharing the information, and the details of recipients. This database, which cannot be outsourced, must include time stamping and audit trails to prevent tampering. Information not originating within the company must be entered into the database within two calendar days of receipt. The database will be preserved for at least eight years after the completion of relevant transactions.

Legitimate Purpose and Confidentiality

Sharing UPSI is permitted for legitimate purposes, including obligations under laws, court directions, contracts, and engagements with advisors or auditors bound by confidentiality. Recipients of UPSI are considered insiders and must be notified of their duty to maintain confidentiality. The Board may stipulate further guidelines to ensure fair disclosure, and the Code will be subject to periodic review in accordance with SEBI regulations.