Are IIFL Finance latest results good or bad?

IIFL Finance's latest financial results for the quarter ending September 2025 reflect a notable recovery trajectory following a challenging previous year. The company reported net sales of ₹3,305.11 crores, which represents a year-on-year growth of 29.31%, significantly higher than the 3.14% growth recorded in the same quarter last year. This marks the highest quarterly revenue in the company's recent history, indicating strong operational momentum.
The consolidated net profit for the quarter stood at ₹376.33 crores, a substantial turnaround from a loss of ₹157.67 crores in the previous year, showcasing a dramatic improvement in profitability metrics. This represents a year-on-year growth of 338.68%, highlighting the effectiveness of management's recovery strategies.

Operating profit, excluding other income, reached ₹1,981.90 crores, reflecting a year-on-year increase of 36.57%. The operating margin also improved to 59.96%, up from 56.78% in the previous year, indicating enhanced operational efficiency and cost management.

However, despite these positive operational trends, concerns remain regarding the company's elevated leverage, with a debt-to-equity ratio reported at 4.15 times. This level of leverage raises questions about the sustainability of profitability and exposes the company to potential financial risks, particularly in a fluctuating interest rate environment.

Additionally, the return on equity (ROE) for IIFL Finance is currently at 7.78%, which is below the historical average and significantly lower than some of its peers, suggesting that while the company is recovering, it still faces challenges in generating adequate returns on shareholder capital.

Overall, IIFL Finance's recent performance demonstrates a strong recovery from previous losses, with significant revenue and profit growth. However, the company must navigate its high leverage and ensure that the improvements in profitability are sustainable in the long term. The company saw an adjustment in its evaluation, reflecting the mixed outlook based on operational performance and ongoing structural challenges.