Hi, thank you. Good morning and welcome to the Q1 FY '27 earnings call of Indian Railway Finance Corporation Limited.

Joining us today from the management team, we have Shri Manoj Kumar Dubey, Chairman, Managing Director and CEO; Dr. Ranvijay Chaudhari, Director Finance; Ms.

Deepa Kotnis, Executive Director Finance and CFO, along with other members of the senior management team. I would now like to invite Shri Manoj Kumar Dubey to share his thoughts on the quarter gone by and provide an outlook going forward.

Over to you, sir.

Good morning, Puneet, and a warm welcome to all who joined this conference call for Q1 results of IRFC, FY '27. I'll just take you back to last FY.

That was the year when we launched our IRFC 2.0 version. Small recap of what foundation that we made last year.

Before that, IRFC was working on single-client model, and since FY '24, there was no business from the railways. After two years' lull, last FY, we started on diversification.

This company never had any experience of dealing with any other customer except Indian Railways. Challenges were daunting, but we knew our strengths: of a very pristine balance sheet, strength of very low overhead cost, and strength of able to raise borrowings at a very attractive rate, better than anybody else in the country.

We really used these strengths, and we chartered in the territory where we had never been in the past. We gave ourselves a target also and the guidance that we shared with everybody around.

It was a little challenging for the team, the new team, which had not done this kind of business earlier, the kind of appraisal needed, the kind of other things required. What happened in that the whole year, it was a kind of 100-meter race where we were doing everything that was possible to be done by a very professional NBFC company.

The results were really good, very overwhelming, and very encouraging for the company. As you know that last year against our guidance of ₹60,000 crore, we could sign agreements worth more than ₹75,000 crore.

Against the target of ₹30,000 crore disbursement, we could disperse more than ₹30,000—₹35,000 crore. Now, with the success that we had last year and the kind of growth in the business that was quite visible now, this year we have declared ourselves as a year of consolidation and a year to plan for a mid-term and a long-term.

Mid-term is 2030, and the long-term is 2037 for a 10-year plan. This company, as as the name goes Indian Railway Finance Corporation, basically this company for the 10 years also will be doing financing for mobility-centric assets mainly.

Apart from that, all the allied sectors where there is a backward/forward linkages, we did very well in last FY, those things will be continuing. Second plan and the business plan we will be on will be: A, we remain the sole financing arm for the Indian Railways, and at the same time, diversification and the assets acquisition in the other sectors which are linked with the railways will continue.

What we did in Q1 is we have started working on two very important themes that this company has decided. One is Fund in India.

Now, the Fund in India means that for Metro Railways and for the Indian Railways also, apart from GBS, for the last 20 year, 25 years if you look at, all the fundings used to come from bilaterals and multilaterals directly. They had their pros, and they had their cons also.

Those were the era when Make in India was not very established in the country. This Fund in India is directly related to Make in India.

20 years later, when we talk today in 2026, almost everything required for the trains running or mobility is being produced, manufactured, everything is being done in India either by an indigenous company or by the MNC or by the joint ventures. With complete Fund in India available in the country, Make in India available in the country, Fund in India is going to be a accelerator, a kind of theme which will bring synergy to the development at a very fast rate.

Fund in India means that IRFC wants to be a conduit where the bilaterals or any multilaterals if they want to put money in India, they give this money to IRFC. IRFC leverages this money, makes a bigger kitty, and it gives a bespoke solution to every customer in the whole-of-government approach.

Now, the word bespoke is also coined for the fact that we don't want to have only one model, that you quote and I become L1 and I give you the money. No.

Every customer will be given a kind of tailor-made solution to their requirement of finance. There are infra projects who need funding for 30 years.

There are infra projects who need funding for 20 years. There are government agencies who want to check the risk for currency fluctuations.

There are few who want to hedge at a later time. All these things will be taken into account, and we are planning multiple kind of models where we can offer it to the various customers.

Apart from what we did last year, this year we have already ventured out in Metro Railway arena. When I say Metro Railway, today it's a very vast term because hand by hand, side-by-side with Metro Railway, the new concept of rapid rail, which already is proliferating in Delhi-NCR, is going to be a game-changer in the future with the kind of smart city that India is pursuing.

Apart from that, as it is in public domain, we all know that seven high-speed rail corridors has already been announced, and government is very, very serious to take it forward very quickly, apart from one dedicated rail freight corridors. Now, the total expenses or the planning of the financing is in tune of ₹16 lakh crore for high-speed rail corridor or nearly ₹3 lakh crore for DFCs, coming about to be around ₹20 lakh crore.

IRFC is actively working for being part of this financial solution, and we believe that these two works will have a pipeline for IRFC for more than a decade, with as a ballpark figure, more than ₹50,000, ₹60,000 crore of disbursement every year. This going forward should became the mainstay of the company.

Apart from that, metro and rapid rail things should bring out around ₹20,000 to ₹30,000 crore every year. Gencos and ports and other things where we are already venturing will be another areas where things will be coming.

Going forward, this year we are in process of making a plan for around ₹50,000-plus crore of disbursement for the next decade. We are working on that.

While working on that, this year also the kind of guidance that was given last year, that remains intact for us. Q1 is always a slow year for the disbursement, but as you saw last year, last FY, Q2, Q3, Q4, our disbursements will also pick up.

We are sure that we'll be doing what we did last year or even better than that. Far as numbers are concerned, it is already there.

A good thing for this IRFC team is that every quarter we are making higher than higher. This year also almost everything right from the revenue numbers to PAT numbers, everything is highest ever in the history of the company.

We as a team are also geared up. During the discussions, I'll also talk about the appraisal part and the team-building part.

Those things will come up, and I'll have long discussions in those also, because this year consolidation means putting everything in place in this FY for a very long journey and a successful journey that IRFC is envisioning for 10- to 20-years horizon. Thank you so much.

Yes, please.

Hello? Hi.

Yes, Mohit.

Hi, good morning, sir. Congrats on a decent set of numbers.

Good morning. Sir, first of all, just wanted to have a view as to how we are looking at the disbursement and the AUM growth this year.

Obviously, Q1 was slightly tepid, as you also highlighted, and even AUM we had a slight decline. Do we hold to that guidance of touching ₹5 lakh crore as a AUM in half year, and where do we see ourselves ending the year with in terms of AUM and disbursement growth?

As I told you right in the beginning, Q1 is always sluggish and slow for the kind of disbursement because we don't have very big pipeline right now. Yes, we are looking forward to few refinancing assets also in the future in this FY itself.

As I said, Q2, Q3, Q4 disbursement will pick up. The slight decrease in AUM that you found on the accrual basis whatever payment has to come back from the railways, we always take into account as decrease in our AUM for the quarter one.

Although it will come in September, but as per our Ind AS system, we always take a equal proportionate hit in every quarter for decrease. Now, disbursement in this quarter is not very high as we did in last year also.

It is around two ₹2,000 crore itself. Going forward, as I said to you, that will be picking up, and the guidance that I've given right in the beginning of the FY that whatever we did last year, we intend to surpass that in this year also.

Going forward, we are working, as I told to you, about this high-speed rail corridor and DFCCIL, things are looking very bright for us.

End of the year AUM number you want to share?

End of the year our AUM should be better than what we closed last year on the net basis.

Agreed, sir. Any growth guidance that you would like to give in terms of AUM, how much we expect in terms of growth?

Because obviously, it's—

I told you, we ended up last year at ₹4.84 lakh crore. This year whatever payment will come back from railways, that will always be deducted from the net of AUM.

Whatever we'll disburse this time will be more than that, and we'll be hoping to catch around ₹5 lakh crore by the end of the year. That guidance remains intact.

Okay. By the end of the year, we'll be catching ₹5 lakh crore, sir.

Correct, sir.

The impact on PAT and NIM will be like this only because whatever we will be adding will be nearly 100 bps or even more than that kind of margin. Whatever will be deducted from my AUM will be 35 bps or 40 bps margin things.

On net basis, my PAT will show a growth, my NIM will show a growth. All these yielding kind of thing, all the ratios and parameter will show better output, even if we are not going very huge in terms of our AUM.

That is the game plan for this company.

Got it, sir. Got it.

The focus is going to be more on the bottom line than the AUM growth, sir.

Obviously, yaar, we are already ₹5 lakh crore. I have given you enough indications when I talk about something on the platter in tune of ₹20 lakh crore, which is in public domain.

It is not that I'm telling you. If you follow my honorable minister, you see what he's talking about about high-speed rail corridors and these things.

Obviously, they are railway projects, highly capital intensive. ₹20 lakh crore will not come from the GBS.

In the past also, it has not come from the GBS. Last time, both DFC were funded by World Bank and JICA loans.

This time, why we talk about Fund in India, Fund in India means that anything that will go to these agencies, we are trying to make a solution where it will go through IRFC. Right?

Got it, sir.

We are sitting on the volcano of the business. You see that.

Yes, this is a year when we are trying to make a solution for that, very robust solution, so that this becomes our mainstay for next decade.

Got it, sir. Got it, sir.

Sir, on the NIMs, I understand directionally our NIMs will improve because obviously the mix is going to change in favor of higher-yielding assets. Last quarter, we highlighted that this year we are expecting our NIMs to touch 1.65%.

We are at 1.48% in Q1. Do we expect we do that—

Once you meet to me in Q4, you'll find that that is happening because by Q4, we'll be reducing the low-NIM kind of business from our AUM and putting more of the high-margin businesses into it, it will happen. Interestingly, I'm not making comment about any particular financial institution, you will be following more than me.

I'm also following the results of last FY and Q1 of all the financial company, including banks and NBFC. I am again reiterating, everybody's playing on the turf of IRFC now.

Okay? We are going to be the game-changers.

If you are following the rates being quoted on the open tender of any of the gencos and transcos, you see what kind of rates are coming now. We are very comfortable at 8%.

Others were never lending at 8%. Beneficiary is the country as a whole.

Now onwards, the kind of low overhead cost that IRFC is maintaining and transferring this efficiency to the customers, every other competitor or the sibling in the ecosystem are forced to bring in that efficiency. Otherwise, their NIM will have an impact.

My NIM is not going to have an impact. I'm going to work at 8% also, making a margin of more than 100 bps.

Others perhaps will have difficulty, and if you look at the numbers, everybody's NIM is decreasing across the board. Fair enough.

Got it.

Got it.

We have a very small base of 1.5, we believe that in the next decade our NIM will keep growing and growing. Yeah.

Got the point. Basically, for the full year, we expect the NIMs to be above 1.65% or is it going to be the quarter four NIMs?

1.6,

you say 1.65 is not a iron-cast figure. What we feel that 10 basis points my NIM should grow on an average every year, that remains intact.

That is what we are very meticulously working forward to.

Got it, sir. Got it.

We wish to reach 2% NIM by the end of 2030, that is the target for the company. Perfect, sir.

Got it.

Got it. Basically, just to reiterate, we are saying disbursement will be better than ₹35,000 crore that we disbursed last year, and AUM we should be reaching around ₹5 lakh crore by the end of the year.

You got it right.

Okay. Thank you, sir.

Thanks a lot.

In and around ₹5 lakh crore, again there is no iron-cast number. Maybe it is more than ₹5 lakh crore, maybe it is ₹4.95 lakh crore, but we believe that we'll land up somewhere there.

Thank you, sir.

Hi, sir. My question is again regarding the NII movement.

If I look on a y-o-y basis, your AUM has gone up from around ₹4.6 trillion to ₹4.8 trillion, and even through the last year, we maintained that NIMs will improve. In spite of that, the NII has grown just by 2% versus AUM growth of 4% on a y-o-y basis, which would indicate the NIMs have actually declined, right, compared to the first quarter of last year?

Not really. Not really.

You see, this size of the AUM is so big, and there are differentials in the rates that railway also had offered in the past, 40 bps, 35 bps. Even 40 bps things are now diminishing, and 35 bps project things are now more in my kind of asset things.

Yes, the ₹35,000 crore that we added is not a very big amount. It is only 5% to 6% of the total AUM.

More and the more impact you'll find going forward maybe in a year or two. What we saw last year is my NIM growing from 1.40 average to 1.50 for the whole of FY '26.

This year, we are looking forward to NIM growing, and by the end of year when we add more of high-yielding assets in my AUM, we intend to end up more than 1.6%. This is what we are looking forward to.

Sure, sir. There was a very material other income that was [booked?]

this quarter. Could you talk about what that is regarding and— No,

that is a normal fluctuations in the currency, you can say that we have been lucky enough. We have taken some amount in the yen that is parked for funding to there is an agreement for Metro Railway payment, and we are expecting it somewhere in Q2.

That was parked. Had it been a loss, it would have been passed on to them.

Since it resulted in a kind of profit, obviously As per Ind AS, you have to take a call on 30th end of the quarter what are the fluctuations, and it came in our favor, so that is the income that is been shown. Okay.

Okay. Sure.

Last year In fact, last quarter, we take a hit of ₹7 crore. This year, rupee appreciated and yen depreciated, the benefit has come out to the company.

Okay. Thank you.

Hello, am I audible?

Yes,

Yeah. Thank you for taking the question.

Sir, just wanted to understand, we've disbursed loans to some fertilizer companies, which I understand are subsidiary of your sister companies, but however, I just wanted to understand how is it that these fertilizer companies have backward and forward linkages with the railways? Do you have any sort of explicit guarantees or undertakings from your sister companies that is providing us comfort to lend to these companies?

That was the first question. I have a second question as well.

On your second-last slide, you've given a breakup of agreements executed vis-a-vis the disbursements. If you could just elaborate on what are these agreements executed as in what does that really mean?

There seems to be a lag between the agreements executed and the disbursement. Why is the lag really there?

That's it. Very

very relevant question. Why I feel happy hearing this question is the fact that we are a kind of very true B2B company.

We don't spend money or time on going out and talking louder about our business model. The reason being we thought that the kind of rates that we are offering to the market, that will be the real driver, and it has been a driver in the last FY.

Your question is very nicely taken by us, and I'm sure that once we answer it, it will be very educative for anybody who is going through the con-call. Coming to the first question.

How do we derive the linkages to anything, as you rightly said how fertilizer is linked to railways? Railways is at the center of any bulk mobility in the country, I hope you will agree to that.

How we decide the linkages is the fact that if Indian Railways is earning or doing some business directly with the entity, there's a linkage. Now coming to these three fertilizer factories, that is HURL factory, one at Gorakhpur, the other at Barauni, and third at Sindri in Jharkhand.

These are the mega factories which are producing mainly urea and other things for the country. As we are a urea-deficit country, and the requirement of urea for the farming sector is huge, and we are mainly dependent on the import just like for the crude.

Government is working very hard on creating a indigenous system where we try to produce more and more urea indigenously. These all companies are getting their raw material, ammonium nitrate and all, through the railways.

The all raw material is also coming through the railways to their siding. Siding is something which is put inside a very big factory where railways movement can be done directly, point to point.

All raw material for production of urea is coming by the railways, and finished urea is all taken out from that factory by the railways. This is how railways has got a direct linkage with all these three factories, and that is how we come into the picture.

Now the second thing, the guarantee that you told, is a very important question and very good question to know. Most of the people may not be knowing how these factories work in terms of urea selling.

These are all sold-out item to government agencies, and they are working on cost-plus model. There is absolutely no risk in their production because everything is bought by the government agencies, and the model that government of India has fixed for them is a cost-plus model.

Reason also is very clear. The raw material for these productions are all dependent upon the foreign things.

Government has got a lot of other benefits by producing things indigenously, and that is why they have given them a model where they should produce, whatever cost comes, they get some margin on that, 10% to 12% margin. It's a very set business.

What we did last year, we refinanced it. This loan was already there by a lead bank SBI and other banks were there.

On the lighter vein, in our company we say that by refinancing to a very strong entity, we are very sure of the appraisal part. Maybe PNB was also part of that, I'm not sure of that, but SBI was a lead bank.

What we brought in was further efficiency into it. There was some x rate.

We refinanced it by reducing by some 50 50 or 40, I'm giving a ballpark figure, but obviously not less than 50 bps deduction that I've brought in in their cost of borrowing. What is the net result?

Net result is, IRFC is also making very good profit, and whatever savings we are bringing in the cost of borrowing for that company, that saving is directly going to government of India. You see how good model is this, that government's burden is getting reduced, and we as one of the financing companies are here to provide some financing solution at quite attractive and cheaper rates.

It's a win-win scenario we have brought in the system. As I mentioned to you in the beginning that now IRFC, by bringing its own efficiencies into the system, are creating a scenario where government entities where there is no risk per se are going to be benefited either by our rates or somebody competing with us and playing on our turf and providing better rates to any of the entities.

That's good and good in terms of financing assets which are owned by the government for the interest of the masses in general. This is question number one.

Coming to question number two, the table that you are talking about, all these ₹92,799 crore assets were greenfield assets including some brownfield also, which we entered into agreement last year. Now, for any greenfield projects, funding is not done in the same year.

It takes around three to five years. That is how ₹92,799, ₹37,000 crore we could disburse, and rest are in pipeline whose disbursement will take place in one to three years.

I hope I have clarified you.

Yes, sir. Thank you.

Hi, and thank you, and congratulations on the strong quarter. My question is on diversification.

Could you provide an update on the progress of major diversification initiatives that you guys have initiated, like the metro financing such as Hyderabad Metro project and other infrastructure lending? To my attention that there were some media reports suggesting delays, should we investors expect these projects to begin contributing meaningfully according to guidance provided previous quarter or is that timeline pushed to later?

Yes, as you rightly mentioned, we are now apart from what we did last year, we are going to proliferate in high-speed and brand dedicated freight corridors, metro rail, rapid rail, big-size ports, gencos, transcos, any renewable energy projects which are linked to the railways. These are all the plateau, and as I mentioned right in the beginning, we are trying to bring out a kind of financial solutions which are not regular and typical in the market.

We are looking forward to create something bespoke for client to client. Yes, Hyderabad Metro is right on track.

We expect that with their Phase 2 Phase What we are we have entered into agreement is for refinancing of Phase 1, which is already working for the last 10 years. There is you may be aware that they are coming out with their Phase 2, which is even longer lines of nearly 200 km worth around ₹40,000 crore.

Perhaps they are looking forward to have a decision on that also, and maybe that our funding size gets bigger for Hyderabad. Not specific to one project, we are, as I mentioned, we are coming also with the solution for almost all the metro railways which are either in the running or going to come up in the future.

There is a huge demand for metros and rapid rails in the country as, we are we have embarked upon huge smart city projects. By 2047, it is understood that more than 60% of the population will be living in the urban side.

Knowing that, we are focusing more on the mobility side of the urban development rather than on building side. These are the very lucrative businesses where we need to give solutions in a manner that I have mentioned in the last questions.

I hope I have clarified.

Thank you so much, and congrats again.

Thank you, all. I think we had very relevant questions, and what we wanted to disseminate as information to all our shareholders, most of the guys they go through the con-calls.

We have tried to give them very clear guidances and the information regarding what company is doing and what company is planning to do. We wish to capitalize on the momentum that we gained last year.

One particular thing that we always say that 0% NPA is not a kind of status, but a business proposition for us. This company, going forward, whatever businesses that we look forward to get into our kitty will surely ensure that they are best-in-class, probably in whole-of-government approach, either directly or having some linkages with the government, so that our comfort level remains intact.

The kind of guidances we have given for one year, for five years, for 10 years, we remain intact to that. Thank you so much.

Thank you.