How has been the historical performance of IIFL Capital?

Revenue and Profit Growth

Over the seven-year period ending March 2025, IIFL Capital’s net sales have shown a remarkable upward trend, rising from ₹835.13 crores in 2019 to ₹2,405.02 crores in 2025. This represents nearly a threefold increase, underscoring the company’s expanding market presence and operational scale. The total operating income mirrors this growth, reflecting consistent business expansion without reliance on other operating income streams.

Profitability has also improved substantially. The consolidated net profit surged from ₹171.43 crores in 2019 to ₹712.34 crores in 2025, more than quadrupling in value. Earnings per share (EPS) followed a similar pattern, climbing from ₹5.37 to ₹22.98 over the same period. This growth in bottom-line performance indicates effective cost management and operational leverage, despite rising employee and manufacturing expenses.

Margins and Expense Management

IIFL Capital’s operating profit margin, excluding other income, has remained strong and relatively stable, fluctuating between 34.4% and 45.2% over the years. The margin stood at 41.46% in 2025, reflecting efficient control over operating costs amid rising revenues. Gross profit margin also improved to 40.73% in 2025 from 36.34% in 2019, signalling enhanced profitability at the core business level.

Employee costs and manufacturing expenses have increased in absolute terms, consistent with the company’s growth and scaling operations. Employee costs rose from ₹256.64 crores in 2019 to ₹590.52 crores in 2025, while manufacturing expenses nearly sextupled from ₹88.14 crores to ₹496.20 crores. Selling and distribution expenses also increased, reflecting expanded market activities. Despite these rising costs, the company’s ability to maintain healthy margins is noteworthy.

Balance Sheet and Financial Position

The company’s balance sheet has strengthened considerably, with shareholder’s funds increasing from ₹967.74 crores in 2021 to ₹2,507.23 crores in 2025. Total reserves have more than doubled from ₹902.50 crores in 2021 to ₹2,346.67 crores in 2025, reflecting retained earnings and capital accumulation. Book value per share has also appreciated significantly, rising from ₹31.95 in 2021 to ₹80.89 in 2025, indicating enhanced shareholder wealth.

Total liabilities have grown in line with business expansion, reaching ₹7,932.98 crores in 2025. Notably, the company maintains zero long-term borrowings, which suggests a conservative approach to long-term debt. Short-term borrowings increased to ₹937.23 crores in 2025, up from ₹291.59 crores in 2021, likely supporting working capital needs amid growth.

Current assets have expanded robustly, with cash and bank balances rising from ₹1,677.54 crores in 2021 to ₹4,010.17 crores in 2025. This strong liquidity position is complemented by growing current investments and short-term loans and advances, which together underpin the company’s operational flexibility.

Cash Flow Trends

Cash flow from operating activities has shown volatility but improved markedly in the latest fiscal year, reaching ₹870 crores in 2025 after a negative outflow in 2024. This recovery highlights improved operational cash generation. Investing activities have generally involved outflows, consistent with capital expenditure and strategic investments, while financing activities have fluctuated, reflecting debt repayments and capital management strategies.

Summary and Outlook

Overall, IIFL Capital’s historical performance reflects a company on a strong growth path, with consistent increases in revenue, profitability, and shareholder equity. The firm has managed to sustain healthy operating margins despite rising costs, while maintaining a solid liquidity position and a conservative long-term debt profile. Earnings growth and book value appreciation further underscore the company’s value creation for investors.

While short-term borrowings have increased, the absence of long-term debt and the strong cash reserves provide a cushion against financial risks. The company’s ability to generate positive operating cash flow in the latest year after prior volatility is a positive sign for sustaining growth and funding future investments.

Investors analysing IIFL Capital should consider these historical trends alongside market conditions and sector dynamics to gauge the company’s potential for continued expansion and profitability.

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