Good morning, and welcome to Q4 and full year FY '26 earnings call of Indian Railway Finance Corporation. We have with us Shri Manoj Kumar Ji Dubey, Chairman and MD, CEO, accompanied by Shri Ranveer Sahay, Director Finance and CFO, and other senior members from the team.

Now I request Mr. Dubey to share his thoughts on the quarter and financial year gone by and provide us with an outlook going forward.

Over to you, sir.

Good morning, Manish, and good morning everyone who is joining the con-call. Good morning from the whole team of IRFC.

It's a very auspicious, happy day for us. We started on our new journey of diversification, which we typically call IRFC 2.0 when we started FY '26 last year on 1st April.

The highlights of starting on those days was one, that we had been conferred Navratna status, and at the same time we had promised to the investors and our shareholders that we are embarking on a new journey of diversification, which is going to take company on a different trajectory of growth. Every quarter we promised something, and I'm very happy that today when we closed our financial year and we are out with the official numbers, number one, for any management the first thing is to be tested on their statements that they have made.

I'm very happy to share that we promised with a guidance that we'll be sanctioning more than ₹60,000 crore of assets and we'll be disbursing nearly ₹30,000 crore over the year. It was a difficult task for the fact that there was no pipeline for this company as for the railways whatever was assigned, it was disbursed in the same year.

When we started FY '26, there was zero pipeline. The challenge to the team of IRFC was to create a pipeline as well as disburse it.

Typically against what we gave the guidance of ₹60,000 crore, we crossed the mark or we reached the mark of nearly ₹74,000 crore for the year in terms of sanction of assets, and against the guidance of ₹30,000 crore for disbursement, we could do around ₹35,000 crore. That is heartening that as a management what we spoke, what we promised, what we given gave as a guidance, we could surpass that.

Now morning shows the days, as you say, as we all say. Now when we are embarking on next FY of this new journey 2.0, we are obviously a little relaxed in a manner that we are confident that what we proposed to do for the growth of the company, we are more confident to do it.

We are not relaxed on the for the fact that growth will come on its own, we have to work for that. Numbers, as you see, overall numbers for the year, financial year, all the parameters have shown it's highest in the history of the company.

Be it the revenue, it is highest for the company in all the years together. PAT, again it is highest.

We have crossed the magic figure of ₹7,000 crore this year. Our net worth is consistently growing from ₹52,000-odd crore, now it is ₹56,000-odd crore plus.

The biggest indicator is the net interest margin, and we feel that we are at a sweet spot for the fact that all these years we worked on a flat NIM because the margin from Indian Railways was fixed. This is the first year for IRFC when it tested the success of getting higher margins despite chasing the best quality assets through RFPs and competition.

Despite the fact that we competed and won the bids, my margins are quite higher than what we used to get from the railways, and that is having a very positive impact on my NIM. Going forward, to summarize all the indicators, that is top line, bottom line, net worth, my net interest margin, my EPS, we have given a target to ourselves that in the FY '27 and going forward we should grow in double digit.

In fact, that was a target that we gave to us for the profit last year, and end of the year we ended up around 8%. Quarter four was little flat to subdued for the fact that there were some provisions to be made because for the railway assets there was no system of provisioning because it was sovereign asset.

When when we are funding to even CPSEs or the state governments in the ecosystem of whole-of-government approach, still, as per RBI guidelines, provisions are to be made. There are more expenditure in CSR in the last quarter, it happens typically.

Taken all together, Q4 PAT is flat, but revenue has shown the green shoots and a very high uptick of 9%, which is matching to our aspirations going forward that our top line also in FY '27 should grow handsomely, maybe touching more than 10% also, and this will start showing right from the Q1. On these notes, we are not putting in numbers as a guidance for FY '27.

What we have decided that whatever we achieved last year, which was around ₹75,000 crore of sanction of assets and nearly ₹35,000 crore of disbursement, that should be the benchmark going ahead. Management is very confident that going ahead, there has to be things going positive on these lines.

We'll be surpassing these numbers in this current year also. Quarter after quarter it will unfold how the story is going to pick up the strength.

The last comment is on asset under management, which is the key indicator for the kind of business, sustained business the company is doing. You see, for the last three years the asset under management for the company was flattish, hovering around ₹4.6 lakh crore.

This year, as you see, on net basis, when I talk net basis, then it takes care of all the repayments that came from the Indian Railways towards the older loans. On net basis, on the on the end of the year, the asset under management has grown to ₹4.85 lakh crore.

Going forward, we expect that in the year in the FY '27 the magic figure of ₹5 lakh crore for AUM, we should touch sometime in H1, maybe early to that. Let us see.

Overall, despite the geopolitical situations prevailing all over the world, we feel that the capex story of India is fully intact. The dreams of Honorable Prime Minister for Viksit Bharat is right in the place, and complementing that, next 5 to 10 years perspective for Indian Railway Finance Corporation when we are targeting whole-of-government approach for capex financing, we are on the right track and will be having consistent growth.

Thank you.

go ahead.

Hi. Good morning team, and once again congratulations on a strong—

Yeah. Hi.

Good morning. Is my line better now?

Okay. Hi.

Congratulations to the team IRFC for a great set of numbers. My first question was on the sanction numbers at the end of FY '26.

What is that, and going ahead what does the pipeline look like for the sanction numbers? Second question follow-up to that is on the current sanction numbers, what can be the expected disbursements in your prima facie expectations for FY '27?

Thank you, Nilesh. As the number goes, we started with zero pipeline or say very small pipeline of ₹3,500 crore when we did only one deal before the FY started.

This year we sanctioned nearly ₹74,000 crore of assets in FY '26. Disbursement stands at nearly ₹35,000 crore.

It has few marquee deals of refinances. One very important deal that we did with Dedicated Freight Rail Corridor, that is our sibling company, where we refinance a loan of World Bank of nearly ₹10,000 crore.

Second marquee deal was with the joint venture project promoted by our Maharatna siblings NTPC, IOCL, and Coal India, that is Hindustan Urvarak & Rasayan Limited, that we did in our Q4. That was more than ₹12,000 crore refinancing deal that we did.

Apart from that, we did few deals in Genco side, NTPC also we did with their subsidiaries directly on the NTPC balance sheet also. Taking all together, we crossed the mark of ₹35,000 crore disbursement.

Going ahead, this year as I said in my opening remarks, as we have tested the success of diversification, apart from the railway business, if any, which is coming from them, we expect that in the FY '27 our sanction should be more than ₹75,000 crore. Now how high it goes, we'll review every quarter, but we are sure that we'll be crossing that mark of ₹75,000 crore that we did in our very first year of diversification.

Similarly on disbursement front, last year was a tight year for the fact that there was no pipeline. Now that we have a pipeline and we are expecting good business starting from Q1, we believe that the mark of ₹35,000 will be again breached.

The important and interesting thing that I keep on telling every quarter is that for this company, which was doing business only with single client Indian Railways where margins were fixed, those margins used to be 35 paisa for projects and 40 paisa for rolling stocks. When we are competing and doing business for the very, very attractive and good quality assets in government system also, we are able to garner a margin of more than 100 bps.

What will happen that this ₹35,000 crore-odd that we are doing business, it is akin to nearly a ₹1 lakh crore that we used to do with Indian Railways in terms of yield. That is a sweet spot for IRFC, and going forward as you see, all over financial parlays, everybody NIM is under pressure, while IRFC, because of the fact that the NIM base was very low, quarter after quarter we'll be showing better NIM.

That is the answer to your question, Nilesh. I hope I've clarified.

Got it, sir. That was very helpful.

Second question was on this incremental NIM. While you rightly pointed out that the NIMs are way higher in the new business, what we are doing ex of the erstwhile railway specific business, just wanted to understand over here today if we are giving X rate to the prospective or the potential borrower, typically what rates are we undercutting?

Say what yield was being offered by someone else, and what are we offering on the yields per se?

You see, in the market you have all kind of assets. There are risky assets where you can charge more.

There are pristine assets, as typically you say, A class assets, when the assets are rated. Obviously when it is rated, when it is promoted by Maharatnas with very strong balance sheet, if an asset is renewable asset, every class of assets is attracting different kind of competition.

We are always looking for the best class assets because we are one of the rare companies not only in India, but in the world, for the size of balance sheet of more than ₹5 lakh crore we are zero-NPA company. Typically every forum I say that zero NPA is not a status symbol for this company, it is a business proposition.

Why it is a business proposition? Because of zero NPA, I'm attracting cheaper borrowing from the market than my peers, which helps me in offering better rates.

For the fact that it attracts my investors also because everybody likes to have a company in their kitty who are having the best class assets. We are not participating into high-risk, high-reward assets.

We are participating into assets which are highly rated, A, A class, A-plus, double A, triple A also. That is what I mentioned to you, typically here the margins are in tune of 100 bps to 120 bps, not more than that.

In this bracket we are competing well. We are competing not only with NBFCs, we are competing with all the banks also.

Typically, for this class of assets nowadays banks are also coming for as a long tenure of 10 years. Yes, it's a crowded place, but the happy thing is that despite being the crowded place for the best class assets, IRFC is winning more than 60% of the bids.

Going forward our margins, we are looking forward for margin in tune of 100 bps to 120 bps typically, on an average.

Got it, sir. One last question from my side.

Basically, the assumption is very rightly mentioned that 100 to 150 bps of differential margins are there. In the erstwhile business of railways, we got certain benefits of tax, etc.

also. Not going into detail about how the ROA tree would look like for the new business and the old business, but adjusting for this tax benefits and the lower provisioning requirement, etc.

from the Indian Railways, at ROA level, say today at company level what I can see from presentation, we are at approximately 1.39%, where I believe 35,000 is from the new business and the balance ₹4,30,000 crores ₹4,50,000 crores would be from the erstwhile business. Just a broad difference in the ROA profile of the new lending versus the erstwhile lending.

Any differential if you can help me on the ROA, that would be very helpful.

I'll tell you the general thing. You rightly said so.

Today, say, my total AUM is ₹4.85 lakh crore, and the new business is typically ₹35,000 crore. The percentage comes out to be nearly 5%.

What target we have given to ourselves, in the last con-call also we talked about this, this company feels that going forward, our asset quality should be 60:40. So 60% should typically be from the Indian Railways, which is cost-plus model at fixed kind of margins, and 40% we are looking forward to garnering from the diversified field.

When you take two together, you can put the numbers. At 5% we stand at 1.39%.

This has come out from 1.34%. Going forward, as I said, you will be seeing a consistent improvement in ROA.

Now where will it land, that is a calculation that you can do. It's very simple to do based on our 5% of diversified portfolio.

If you are at 30%, you can reach to a conclusion what is going to be the ROA going forward, say, in next 2 to 3 years.

Okay. Any sense on what kind of ROA?

I understand because this mix would include a lot of calculation, which on the tax benefit one is getting and provision requirement are slightly lower.

Nilesh, on tax, we have enough depreciation kind of thing in our kitty. This company will remain tax-free with the kind of already accumulated depreciation that we have for next 5 to 7 years.

Rest be assured, company will be getting more and more leasing business for rolling stocks in the future, not only with the Indian Railways, we are going to do it for metros also, for rapid rail also. We are very comfortable that for quite a longer period right now, it is quite visible that for this company PBT and PAT will be same, and we'll be getting the benefit of the tax that we are getting out of depreciation.

There is no concern right now for next 5 to 7 years on that account.

If I just do the rough calculation where if NIMs are 100 bps higher, 2.25 to 2.5 is the NIM, and typically operating costs are 0.25, PPOP runs to 2.25, where provisioning, say assuming standard asset is 0.4 and under construction is 1%, again provisioning number of 0.5. Since no tax required for next five four years, ROA would be 2% for the new business.

It is right to assume?

I'm happy to hear from you. This is how you all help me out.

Your numbers I'm putting on my paper, and I'll be validating it and coming back to you next quarter. Precisely this is the benefit that management gets by interaction with you guys in the conference call.

Your numbers must be perfectly fine because you are good at it. I'm not doubting on numbers.

I think you are doing the right calculations. This is not coming from our side because it is your job to do the calculation, I can give you the indicators.

You have taken all the indicators in the right manner, that I can assure you.

Sir. Got it.

Once again, thank you so much for patiently replying to all queries.

Thanks, Nilesh. Thank you.

Hello, can you hear me, sir?

Yes, Mohit. Please go ahead.

Hi. Good morning, sir.

Sir, a couple of things. First on this, the sanctioned disbursement that we made to this fertilizer plant, sir.

I believe sir, our MOU is allowing us to disburse it to the railways and any other company which are in the same ecosystem. This disbursement into fertilizer paper, how is it correlated to our core sector, sir?

Just trying to understand this.

Yes, Mohit. You must be knowing, or if you're not knowing then let me reiterate, our mandate says that anything having a backward or forward linkages with the railways, we can fund.

Meaning thereby, any entity which is bringing in business to Indian Railways, we can fund. Typically this high-production fertilizer companies, they're all linked to the railways.

There is railway siding there, and all evacuation of fertilizers are taking place through the railways. A.

B, the raw material for that fertilizer company like ammonium nitrate, they are also hauled by the railways itself. They are all are having railway sidings within their campus, and all evacuation of the finished good and raw material going to their factory is through the railways.

They are coming under the ambit of backward and forward linkages with the railways, and that is how we have funded them.

Understood, sir. Understood.

That is, Mohit, the sweet spot for IRFC, because the moment you talk about backward or forward linkages, there is hardly anything left in infrastructure which is not having a backward or forward linkages with the railways.

Got it. Basically any entity which is using railways in any capacity becomes sort of our target customers.

Correct. Absolutely.

That is how we did funding to two of the mega fertilizer companies of the country. One which is already under production that you mentioned, HURL, which is promoted by our Maharatna giants like NTPC and IOCL.

The other one also we have funded in Talcher, which is under construction, that also is promoted by another Maharatna giants like GAIL and Coal India and Rashtriya Chemicals, which is Navratna. Yes, any evacuation of fertilizer will take place by the railways and any raw material going to them is also through the railways.

They are very valued customers, and we are very happy to align with them and fund them at a very attractive rates.

Got it. Sir, the second thing is regarding that mix we are targeting to have a 60:40 mix going forward in three, four years, where 60% is going to be railway and 40% is going to be non-railway, which is at 5% right now.

Sir, in that situation, even if I'm presuming a 5% AUM growth, we'll be needing almost a ₹1 lakh crore of disbursement every year so that we have a mix of 60:40 by let's say three, four years. How do we look at this number, sir?

Is it possible to have such a high disbursement in a non-railway sector

because— No. You are missing a point.

Every year there will be repayment of ₹20,000-plus crore from the railways. When I'm saying that I'll be maintaining my AUM or growing it, yes, ₹40,000 crore is a base that I've talked about.

Let us see how it grows. Company aspires to have a kind of 30% to 40% mix from the non-railway business.

You see, in the first year, morning shows the days. In the first year, wherever we participated without the pipeline, we were able to disburse ₹35,000 crore.

Now, with the kind of rates that we are offering and because of our low borrowing cost, because of our zero-NPA status as well as because of very low overhead cost, we are able to fund at a very attractive rate to high-quality assets. Today I'm not required to market myself, the business is coming to me.

We are encouraging good quality assets to go for RFP as we are participating to RFP. The sweet spot is that I'm giving a typical example.

There is already a RFP in public domain. NTPC and UP government is coming out for as big a tender as ₹28,000 to ₹29,000 crore.

Now, we are also participating. It will be a very cutthroat competition because it's a very good asset.

Potential for IRFC is to grab nearly ₹16,000 crore because that is our limit. We do not have an exposure to many entities because we earlier did only with the Indian Railways.

For the fact that our net worth is quite high, it is as high as ₹56,000 crore, so as per RBI guidelines, we can pick up around ₹16,000, ₹17,000 crore of asset in one go if it is a very good asset, and we feel like. These kind of businesses are on the platter.

Going forward, it's not that we said that we'll be 40% in three years' time, but yes, we aspire to. Since we did very good business in the very first year, we feel that the kind of capex requirement is there in the government parlays all over the country going forward, because NIP, you must have heard about National Infrastructure Pipeline.

Nearly ₹20 lakh crore is the projection of more than that for every year to be consumed by the government entities and private entities. Business is there in the platter.

We feel that we will get a good share, and yes, going forward in three years or four years or five years, obviously when we are doing more and more of diversified business, then the ratio will be somewhere nearly 40:60. This is what we are trying to tell the market.

Understood, sir. Sir, that the repayment rate is ₹10,000 crores per year or ₹20,000 crores per year from the existing railway contract?

No. It varies every year, but repayment going forward will be around ₹20,000 crore now.

Okay, ₹20,000 crores. Sir in that case, how should we look at the AUM growth number?

What should we expect as the AUM growth for next couple of years?

We have given us the target that let us cross ₹5 lakh crore mark in FY '27 and maintain it steady. We are not putting in numbers on that.

One thing we are assuring that once we cross ₹5 lakh crore mark, you won't find any dent in that, it will be growing. How much it will be growing, that is a different issue.

The better thing is that we will be replacing the lower margin business of Indian Railways with the higher margin business of diversification. Even apple-to-apple, if I'm, say, replacing ₹30,000 crore from the old business and adding ₹30,000 crore from the new business, my NIM will be at least having two times more than what I used to get from the old business.

In that case, even if my AUM remains steady somewhere more than ₹5 lakh crore and I'm replacing low-margin business by high-margin business, my NIM will be growing, my PAT will be growing, my EPS will be growing. That is a clear message that we want to give to our investors.

Got it, sir. Sir, what was the NIM differential between the two businesses just to reconfirm?

Is it 100 basis point between the new and the old one?

Yes. So 1.4% used to be from the railways, but what we expect from the new business is nearly somewhere between 2.2% to 2.5%.

Average, as you see, what we have already delivered, we have delivered from average NIM of 1.42% to 1.50% for this FY, which is nearly 6% up. Next year we want to see better margins because we will be getting benefit of what we have added in last year and what we'll add this year.

We are giving us a target that my NIM for FY '27 should grow minimum 10%.

The NIM in the sense from 1.5% we should be expected to rise to what, 1.6%, sir?

1.65%. 1.65%.

1.65%.

Yeah. End of the year.

End of the year.

On

my total, on my total assets. On my on my total assets.

Got it, sir. Sir, any guidance you would like to give for the AUM growth, sir?

I know you have said ₹5 lakh crores for AUM, but that is only a 3% that's too conservative.

Mohit, I've given very tough guidance for you, which is very tough on my team. When I say that we wish to grow our top line by double digit, we wish to grow our bottom line by double digit, we wish to grow our EPS by double digit, we wish to grow our NIM by double digit.

You take all four together, you can see without growth in AUM, all these things are not possible.

Got it, sir.

For my team, Mohit, just I wanted to add one thing. For my team, I always keep the target very simple.

Once you put this number that you should grow every indicator by 10%, they know they have to do the calculation how much AUM should grow.

Got it, sir. Just one clarification on the previous participant's question.

Sir, for the tax, you're saying for next 5, 6 years because of the accumulated depreciation we are having, it will be a tax-free entity, even for the non-railway business.

Yes. Till the time we are again getting lease financing.

If we get again the lease financing of the rolling assets, accrual will start again. As of now, whatever we have in the kitty, that is sufficient for next five years.

Got it. Okay.

Thank you, sir. Thank you, Mohit.

Good morning to the team. Beyond the numbers, which has given in very much detail, just want to understand your perspective on how IRFC is preparing to capture future opportunities in railway infrastructure financing through addressing challenges such as rising capital requirements, interest rate volatility, and regulatory oversight.

What strategic levers do you see most important for sustaining growth and supporting the company in the coming quarters? That's my first question.

I'll ask my second question after this. Thank you.

You are asking very complex question, but let my Business Development Head answer this question.

As our CMD sir has told, you must see our previous progress. In last 1 and 1/2 year, we have covered a major milestones, and in last one year we have sanctioned more than ₹74,000 crore.

Going forward also, earlier we didn't have the pipeline, but now as our leader has told that we are confident and we are getting good inquiries from the entire ecosystem. Going forward, there would be a good capital investment in many of the sectors, like there would be a good investment in the power sector, there are many capacities are coming up in the thermal sector, there would be a good amount of investment in the railway sector as well because we are also hearing in the news that there would be a new corridor that would require ₹2.5 lakh crore, there would be a seven high-speed rail corridors, they would require another 16 and a ₹16 lakh crore kind of an investment.

There would be a good amount of investment in coming years in renewable sector, in road sectors, there would be a good investment in the port sector. We are confident that there is a good amount of inquiries we are getting, and we are very hopeful that we will surpass this target at the end of FY '27.

Having said that, regarding the regulatory oversight, because as of now, my net worth stand at ₹56,000 crore, and we have just disbursed around ₹35,000 crore and sanctions only ₹75,000 crore across various sectors across various entities, my exposure norms is open. That gives me a good cushion that I may have a good exposure in coming years over the pristine asset.

That would give me a good comfort. Pricing, we will be aligned with the market.

Yes, there is a hardening in the interest rate in the market, but ecosystem is taking that fact, and based on that we also revise our lending rate so that we will remain competitive and we should be getting the adequate margin to support our top line and bottom line. That is our strategy.

Thank you. My final question, again a forward-looking one.

Looking ahead, how do you see IRFC's funding strategy evolving to meet the growing needs of railways? What measures are being taken to strengthen liquidity, diversify funding sources, and align capital structure with long-term expansion plans?

Thank you.

Sukrit, yes, we remain the sole financing arm for Ministry of Railways and Indian Railways. Having said so, if there is any requirement of extra budgetary resources over and above what Indian Railways is getting from budgetary support, IRFC will be the first financing arm where they will come.

Now, we all know that the kind of expansion that Indian Railways is having, capex requirement that is now hovering around ₹2.6 lakh crore for them for last three years, this is going to continue for 5 to 10 years. If there is any redistribution going forward from this FY or next FY in the budget for social sector and there's pressure not to meet all the requirements of Indian Railways of Ministry of Railways through GBS, we will obviously be there.

Second thing, as my ED BD mentioned to you, if you recall, last time when Dedicated Freight Corridor, eastern and western took place, the funding came from bilaterals and multilaterals. One was funded by JICA, the other was funded by World Bank.

Similarly, high-speed rail corridor, the one that is already being commissioned, it is funded by JICA. Now, there are seven high-speed rail corridor that has been announced, and there is one Dedicated Freight Corridor in the railway ecosystem from Dankuni to Surat has been announced.

Total requirement is huge. IRFC prior to last FY had never ventured out to any of the customers, even to the siblings in the railway ecosystem.

Now that we have already refinanced one of the World Bank loans of Dedicated Freight Rail Corridor for more than ₹10,000 crore, going forward, the requirement for greenfield lines in high-speed as well as DFC is our first business. We will be having our first right on them.

Now how it will be modeled, it is to be seen. Discussions are already on, but rest be assured that in the huge funding requirement that these two things in the railway ecosystem is going to take place, majority of funding has to come through IRFC, and we are gearing for that, we're planning for that.

The moment things will go on, you will be hearing how we are going to fund them. Second, yes, there are many SPVs are also coming, first-mile, last-mile.

Earlier we never used to fund them. We have now started funding them also because their business model is dependent upon railways and it is vetted by Ministry of Railways, we have got good comfort and cushion to take care of them also.

Getting together, as you rightly indicating to us, there is huge business opportunity in the railway ecosystem itself, but we are not limiting ourselves to them. The allied business coming from, as my ED BD mentioned, that from the port, metro railways you will be hearing very soon, maybe in the quarter one only, that we are going in a very big way to take them also on our wings and we'll be one of the biggest players, in fact the loan domestic player per se, apart from the multilateral, who'll be arranging funds for metro railways, which is a very, very big business entity in the country for the fact that almost every state is aspiring to have a metro railways.

We are already in talk with one of the states for their funding. Overall, yes, in the total infrastructure scenario having Indian Railways or railway policy at the center, there is huge business on the platter, and there is enough requirement for IRFC to ensure that liquidity remains there.

We are having very good standing in overseas market also. In fact, you may be aware that we did back-to-back two ECB loans of $300 million worth of yen, then we did successfully for $400 million worth of yen.

Already we have opened one bid of $1.1 billion worth of yen. That speaks volumes about the appetite as well as the preference of the foreign bankers to lend to India because they believe in the story, that growth story that India is unfolding.

In fact, we had a very extensive roadshows also. You may be aware, if you're following us, a big team from our side went to Japan, a team went to Singapore, a team went to Taiwan and Hong Kong.

We have already sensitized all the foreign banks, typically more on yen side, that there's a huge requirement of consumption of ECB loans, maybe yen as a priority right now because right now dollar is not a very preferred currency, but going forward we're looking for the bond market. Once the SOFR rate and things go a little sober, we'll be looking for that also.

ECB contribution, we are looking forward to 30% to 35% in our total kitty. We are focusing heavily on the infrastructure dependent long-term capital gain bonds that government have launched, 54EC.

Earlier we used to be very casual about that, but now we are focusing on it. My market share has gone up to 28% last year, this year this will go up more.

It is coming at a very cheap rate of 5.25%. We were the first company last year who successfully did zero coupon bond.

It's a bullet payment after 10 years, and HNI showed confidence in IRFC and it was mopped up at a very attractive rate. Going forward, we'll be mopping up that also.

Yes, domestic bond rates right now is hardened. It is hardened for everybody, not only for us, but at the same time RTL still is available at cheaper rate having a very moderate repo rate.

All together, last year also we strived to have our total borrowing cost less than G-sec rate, and that is a target this year also, and that is where the sweet spot lies for IRFC. As I mentioned every time, that zero-NPA status is helping us in attracting good lenders to us, and it is a business proposition, and we believe that cherry-picking the good quality of assets will remain so despite the fact that we are hovering out of Indian Railways and going to the whole-of-government approach.

Zero NPA will remain there, and we feel that we continue to garner best of the borrowing rates in domestic as well as ECB markets. I think that comprehensive answer gives you the confidence that even a ₹1 lakh crore disbursement is required from our side consistently every year, we have done in the past and we are competent to do in the future also.

Thank you, and best wishes. Thank you.

Hello, good afternoon, sir. Sir, a quick question with regard to the results.

If you see the PAT from Q3 to Q4, because IRFC is in a business where AUM grows each quarter, if you see last quarter December '25, the PAT was around ₹1,800 crore, while this quarter Q4 it's ₹1,684 crore. A drop of around ₹100 crore.

Plus, if you include the other comprehensive income, it has declined from ₹1,800 crore to 40 ₹1,500 crore approx. In PAT there is a reduction of ₹100 crore, and in OCI there is an impact of ₹200 crore.

Can you please explain that, what is causing that?

Naman, not much to worry. There are few issues which were new to us for the fact that pehle we never had the chance to do provisions because for lending to Indian Railways, it was all zero risk thing.

As per RBI norms, when we fund even to the CPSE or state governments, the provision it will be made. There are other issues.

Let my Accounts Head, Mr. Ajay, answer your questions and your concerns.

Yeah.

See, if you just see the total revenue portion, there is a decline in the other income also. We got a refund of income tax and there was some interest portion in that in the last quarter, Q3, whereas in this quarter there's no such item actually.

On the other side, you see there are some other expenses like CSR expense, we have made some additional provision in the current quarter. Regarding the OCI, this is whatever is there in the mark-to-market.

We have all our borrowings in the foreign currency which are on our balance sheet, those all things are hedged actually. Whatever movement in the market of those currencies, and that we need to make a provision for that through OCI.

This is regarding the total comprehensive income.

Got it.

With— Please. Please tell, then I'll answer you again.

Sure. Then with OCI, I believe for the exposure to Indian Railways at least all the fair value on foreign currency borrowing or cost of hedging should be passed on to the Indian Railways.

Absolutely. You have right understanding.

Then

why is it coming in the financials? Will it be recovered in next quarter, will we see a reversal in next quarter or how will it go?

Because currently it seems like it's impacting IRFC financials.

No, no. This is whatever is there for the ministries, that is passed with the ministry's account actually.

Whatever is there in OCI, it is only our portion, and there are some other items like for the staff benefit cost, that would be coming, and then we have made an investment with the IRCON. There is a movement of that investment also.

That is also coming in that OCI portion, yeah.

Majority of the portion is fair value change in foreign currency borrowing as per the Q4 results. That's where I'm trying to understand, will it be passed to Indian Railways next quarter or maybe it is just because of exposure to non-railways financing which we have done?

In that case, we won't be passing—

No, no. Mr.

Naman, we have two kind of a exposure. One we do for the MOR business and other whatever lending we have done for other than the conventional loan MOR business, that risk is in my balance sheet.

For that, we have taken the full hedge, and these are the MTM valuation for that. Based on the Ind AS 109, we have accounted these on the basis of cash flow hedge.

Whenever these exchange will flow to me on actual basis, accordingly these will get reversed. This is a temporary passing, ultimately it will get reversed and will be reclassified through the P&L.

These are the temporary item for the exposure which I have on my own balance sheet. This will not be passed on to the MOR.

I hope this clarified your point.

Got it. Yeah.

This was helpful. Just one additional clarification with regard to non-Ministry of Railways exposure to CPSE and all those things.

If we have some foreign currency borrowing pertaining to loans given to them, in that case what happens with the currency risk? Is it borne by us, IRFC, or is there a agreement with them that we pass on that cost as well to the CPSEs?

Naman, typically for any non-railway business, we are quoting a rate, and if you are putting ECB mix into it, risk lies with us. As my ED BD told you, what we are doing as a very responsible and safe company that we are hedging it right away.

Right? My hedging limits are quite conservative in terms of yen as well as in terms of dollar.

Whatever we have raised right now for our P&L purpose, we have already hedged it with a very secure kind of ranges. Number one.

Number two, we are also creating a kind of cost-plus model for metro railways, you'll be hearing it very soon, where risk will be passed on to them. Typically now, Naman, Indian Railway Finance Corporation have got two models.

One, you can have a cost-plus model also, we are ready to do that because we have been doing that for long for Indian Railways. Other model is when we are participating in their open bid where they want somebody to quote with all the risks together, we are doing that also.

Going forward, we'll have two kind of things. Yes, what we have decided right now that whatever ECB we are raising for non-railway assets where risk is lying on us, we should be immediately hedged fully for it.

For your kind information, good thing is that what we raise ECB for non-railway consumption, the overall hedging cost taken together, the rates are coming somewhere below 6%, which is very attractive for us.

Okay. Got it.

This was really helpful. My second question is with respect to the exposure which we are now having other than Ministry of Railways, right?

We may have some exposure to state government also. What kind of safeguard we are having in place so that we continue to be a zero-NPA company in future?

Because there can be a risk of default. With Ministry of Railways, there is no risk of default, for others there may be.

What kind of safeguards or guardrails we are having?

Yes, you are very right. The guardrails and the kind of security that we are looking forward is first, in the CPSEs our clients, I can name you and you can get the feeling who are our clients.

Our clients are NTPC or their subsidiaries, our client is GAIL, our client is Coal India Limited or its subsidiary, our client is IOCL or its subsidiary. Meaning thereby, we have done DFCCIL, which is a sibling, then we have lent it to an SPV which is promoted by my siblings like CONCOR and RVNL.

All these names, if you are following them, you'll be very well aware they all are having very strong balance sheet, consistently profit-making giants in the CPSE parlays. It is a cherry-pick among the CPSEs also.

Similarly, when we are going to state governments, mainly into the power value chain, we are completely avoiding any kind of business with discoms, that is not our business because we are not having any kind of experience or exposure in them. There are other siblings in the NBFC parlays who have got the experience and exposure and they will keep on doing it.

We are limiting ourselves to gencos and transcos. Amongst that also, we are cherry-picking those assets which are having very strong balance sheet, having cost-plus model, PPA arrangement in place.

Given you a flavor, we have not gone to any of the states which are high consuming states in southern part, with due regards to them. We have our right to choose the kind of states where we wish to do the business.

We have done the business in MahaGenco, they are the number one state government in terms of having the assets and they're doing very well, their balance sheet is good, their rating is good. Similarly, we have done to Chhattisgarh, we have done to Haryana.

We are planning to do one where there is a 50-50 JV with NTPC and UP government. You can see the kind of cherry-picking of quality in the states we are doing.

Yes, there's a balance sheet and there's a risk, but then we have to see to it that what kind of assets we are picking up. These assets are having backing of state governments with a very strong way, they are tied up, things are there.

Nowadays in the value chain, the payment of gencos and transcos are almost assured. That is why we are typically not going touching anything in discoms because their chemistry is all different.

Answer to your question is, we are taking all due care to ensure that even in a government parlays, whatever assets we are cherry-picking is as safe as it could be. As I always said, you must have heard in the beginning also, zero NPA for IRFC is not a status, it is a business proposition.

If I remain zero NPA, I will be garnering lower cost of borrowing that we are doing in domestic and international market. Rest be assured that the management and the appraisal team is taking full care of it.

Yeah. Okay.

This is very helpful. Thank you.

That's all from my side.

Thank you.

Thank you.

Thank you, Manish. We are very happy to close on a happy note in terms of numbers.

As listed company has got a very onerous task to come back every quarter, gets its report card with everybody. It's already mid of May, Q1 half of the Q1 has already gone, very soon we'll meeting again our investors.

The good thing is that we have already embarked on a new journey of diversification, which is really giving us confidence now, having done well in the last FY. We believe that going forward, every quarter in FY '27, we'll be coming out with very good numbers as the Street expects us to do.

Let us see that the good team good work that is being done by team IRFC continues to enthrall and satisfy the investors who are very dear to us. Thank you.