IIFL Finance jumps 5% after HSBC upgrades stock to 'Buy', sees up to 42% upside

IIFL Finance

The shares of IIFL Finance surged nearly 5 percent on May 13 after international brokerage HSBC issued a bullish call for the stock. The shares of the company were trading at Rs 407.45 apiece in the morning.

HSBC upgraded the IIFL Finance's stock to 'Buy', with a target price of Rs 550 per share. This is significantly higher than the previous target price of Rs 380 per share set by the international brokerage. The latest estimate implies an upside potential of nearly 42 percent from the stock's previous closing price of Rs 388.15 per share.

HSBC said the company's recovery in the microfinance segment, its higher system liquidity and lower cost of funds (CoF) will drive its EPS recovery. The brokerage revised its FY26 and FY27 EPS estimates by -6 percent and +0.5% respectively.

It however noted that higher competition in gold loans remains a potential risk for the firm.

IIFL Finance share performance

IIFL Finance shares have seen strong surge recently, rising nearly 18 percent over the past five days. The stock has surged over 23 percent over the past one month. It is however down over 2 percent in 2025 so far.

IIFL Finance Q4 Results

IIFL Finance on May 8 has reported a consolidated net profit of Rs 251.36 crore for the fourth quarter of the financial year 2025. This marked a fall of nearly 42 percent from the Rs 430.63 crore net profit reported in the corresponding quarter of the previous financial year. The company’s revenue from operations meanwhile fell over 9 percent on-year to Rs 2,591.25 crore.

IIFL Finance also reported basic earnings per share (EPS) at Rs 4.89, and diluted EPS at Rs 4.85. The firm’s asset quality improved slightly, with net NPA ratio standing at 1 percent during the quarter.

Its assets under management (AUM) under the gold loan segment saw a decline of 10 percent on-year to Rs 21,022 crore. It however rose 40 percent sequentially from Q4 FY25. The company attributed the sequential rise to “strong recovery post-RBI embargo”.

IIFL Finance Managing Director Nirmal Jain said, “Gold loans have rebounded strongly post-embargo, and MSME lending continues its steady expansion. Asset quality has improved, with GNPA declining to 2.2%. Backed by a focused digital strategy, the potential to recapture lost business, and a favorable credit environment, we are confident of sustaining and accelerating momentum into FY26. We remain firmly committed to ensuring that our governance is anchored in rigorous risk monitoring, transparent disclosures, and a zero-tolerance approach to non-compliance - striving not just to meet but to stay ahead of evolving regulatory standards."

Also read: Our LIVE blog on Q4 results