Indian Railway Finance Corporation Ltd (IRFC) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (PhillipCapital India Private Limited): Ladies and gentlemen, good day, and welcome to Indian Railway Finance Corporation Limited Q2 and H1 FY '27 earnings conference call hosted by PhillipCapital India Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Punit Chaturvedi from PhillipCapital. Thank you, and over to you, Punit.
Punit Chaturvedi (PhillipCapital India Private Limited): Hi. Thank you. Good morning, everyone, and welcome to the earnings conference call of Indian Railway Finance Corporation Limited for the second quarter and half year ended September 2026. We are privileged to have with us today the senior management team of IRFC represented by Shri Manoj Kumar Dubey, Chairman and Managing Director and CEO; Dr. Sanjay Choudhary, Director Finance and [inaudible]
Punit Chaturvedi (PhillipCapital India Private Limited): Mr. Ghosh, Executive Director Finance and Chief Financial Officer, along with other distinguished members of the senior management team. With this, I would like to invite Shri Manoj Kumar Dubey to share his remarks on the company's financial and operational performance for the quarter and half year ended September 2026, followed by the management's outlook on the business going forward. Over to you, sir.
Manoj Kumar Dubey (Indian Railway Finance Corporation Ltd): Morning, Puneet, and good morning, friends, who are attending this concall. So, as CEO, this is one of the heartening morning for me, when numbers of the companies are beating the guidance and as well as the expectation of the street, the job of CEO becomes easier. So, today is one of the easier days for me after a lot of difficult times and and difficult days to reach these numbers. As as I was talking in the morning with one of the TVs, numbers are not manufactured. They are earned. So, IRFC on embarking on on its on a 2.0 journey, that is diversification journey. If you look at the last six quarters of the company, out of six, five quarters the profit after tax has grown in double-digit, except the Q4 of last FY where provisions were made for new businesses where 1% for greenfield and 0.4% for brownfield provisions are are are to be made as per RBI norms. So, it's a it's a very satisfying day talking in the concall that consistently for the last six quarters in our diversification mode, this company is growing and as I always say that when you talk about all the ratios, every ratio emanates from profit after tax. If a company is not making healthy profit, healthy growth in profit, none of the ratios will show positive trends. So, if I give a picture that in the last six quarters, five quarters, the company's profit after tax has grown in double-digit, you can see at the numbers that all the ratios and everything will be having a positive trend, including net interest margin. Apart from the good numbers, that is for H1, more than 20% rise in revenue and more than 10% rise in PAT, I would like to also talk about and share my other views to the shareholders at large. Where in the past, when we embarked on the journey of diversification, few questions were really coming to the mind of the investors that for the first time we are going on diversification apart from single client model, what is the team that we are having for appraisal? So, I want to inform all of you that in last one year, the number of employees in IRFC has grown almost double. So, you can think of the kind of manpower required that we've added. And you know, in my company, I always say the way we cherry pick the assets, we cherry pick the talents. So, every talent that we have added to our system, they're all best in class that we could get in the country. Top of it, I also want to share a very unique model that I follow as CEO here, that is a that is a model of mentoring and mentorship. To put on record, my Chief Risk Officer is a veteran from the NBFC business. He has been Director Finance of REC. And after that, he's here as Chief Risk Officer, and is also donning the hat of mentoring all the young minds, making them very, very alert about the kind of compliances that is that is required. We have got our advisor, she she she was our Director Finance earlier, and she comes from the ostensible of PFC working there for last 30 years. She brings all the knowledge that is required for borrowing type, and she's not only mentoring, she's giving very active advices to the company on those lines also. My Chief Compliance Officer is a is a veteran from the industry, coming from the PNB side. We have got our advisor, one more advisor from REC side who is retired and they're advising us on the appraisal side. So, we have created the grid of mentors who are shaping, guiding the young minds who are doing the the appraisal, borrowing, everything. So, this is something that I wanted to share, and let my investors be assured that the kind of team that IRFC has created now, is one of the most robust that one can think of. The other thing I wanted to share with you, that with the training of the Railways, we are very, very particular about oversight and compliances. So, whatever RBI wanted us to do, whatever CAG wanted us to do, whatever internal auditing wanted to to be done, in fact, I forgot to mention you that our head of internal auditor auditing is a veteran from government.
Manoj Kumar Dubey (Indian Railway Finance Corporation Ltd): with the all the experience of more than 35 years. So, we have put all the compliance thing right in the place, and we are trying to be best in the class in the country in in relation to any of the banking or NBFC system. We have got the positive feedback from RBI as well as CAG where consecutive third time nil comment has come. So, oversight, compliances, ERP, all go hand in hand with robust results. And top it off top top of it, we also have to look for a long pipeline, and while doing the concall, I'll be talking about the exciting times that we are going to have with all the announcements from the railways also. And apart from that, the good business that we are doing in non-railways entities in the railway ecosystem, where we are garnering higher margins. So, taking two together, we'll be talking about the exciting time going ahead, and maintaining and sustaining the growth that we have done in the six quarters, trailing six quarters, including this particular one. So, with this, I invite you all to have a discussion. Thank you.
Moderator (PhillipCapital India Private Limited): Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Sukriti D. Patil from EyeSec FinTech Private Limited. Please go ahead.
Sukriti D. Patil (EyeSec FinTech Private Limited): I have I have two questions. My first question to Mr. Dubey is beyond the regular outlook, just want to understand what are the top two to three execution priorities you are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in terms of rail railway CapEx, asset growth opportunities or funding, and how are you preparing to manage them while strengthening IRFC's role in the finance space? That's my first question. I'll ask my second question after this. Thank you.
Manoj Kumar Dubey (Indian Railway Finance Corporation Ltd): So, you talked about risk of the railway funding or what? I didn't get that. Can you repeat again the second part of your first question?
Sukriti D. Patil (EyeSec FinTech Private Limited): Yeah. I I I just want to understand the key strategic action you are focusing on you know, such as maybe maybe expanding the asset base, diversifying the finance opportunities, you know, along along those lines can you give some guidance?
Manoj Kumar Dubey (Indian Railway Finance Corporation Ltd): No, I got your question. So, yes, immediate first part was first part of a question was, what are our immediate disbursement targets? So, yes. Last year, when we started diversifying, all 35,000 crore that we disbursed, that were non-IR disbursements. This trend will continue for this FY. Next H2 you'll find that we'll be lending to Metro. We'll be lending to Port. We'll be lending to renewable energy. We'll be lending to thermal power GENCOs who are having linked with the railways. We'll be lending to maybe few road linkages also. These are all in pipeline, almost ready to be disbursed in Q3 or early Q4. And to answer your question in very clear manner, the guidance that we have given that in FY '27 also, we will be surpassing our disbursement that we did last last FY and that guidance remains intact. Now, the second part of the question that you asked is more more exciting because this this funding that we are doing right now, it is that will be finishing. It won't be continuing for long, because ticket size is not more than 20,000 crore or 10,000 crore, like this. But the second point that you mentioned about railway, if you are following our honorable Minister Railways and also the honorable Prime Minister what he announced, there is a sanction of dedicated freight corridor from Dankuni in eastern part to Surat in western part. This costs around this 2000 km plus, this costs around more than 3 lakh crore. There are seven high-speed rail corridors that are already sanctioned and very actively being pursued because country is moving towards Viksit Bharat kind of thing. Railways has also announced eight freight lines where they will be going on JV, joint venture model, or PPP model. So, overall, pie that comes out to be is more than 20 lakh crore. Now, once we have our hand on these pies, these are going to continue for next minimum 10 years.
Manoj Kumar Dubey (Indian Railway Finance Corporation Ltd): holders within the railways as well as the bilaterals. Because, you see, the pie is so big that IRFC alone also won't be able to fund all all everything. So, what is happening is that we are kind of being the sole financing arm of Indian Railways are acting as aggregators. We're already talking to My team is already talking to World Bank, to other multilaterals as well as domestic players, and we believe that by end of this FY, this whole model will be in place. And the way you follow the government because our disbursement is completely aligned to the aspirations of Government of India. So, if you believe that, yes, Government of India is going to have dedicated freight corridors, if you believe that Government of India is going to have these high-speed rail corridors, if you believe that government is really going to have four-laning of the tracks, then you believe that our hands are completely full with the kind of business coming in next 10 years. So, that is what I'm talking to you. Maybe Q3 when we come out to you, we will be giving you clear numbers and the guidance is what model is going to be followed. But right now, what is available in the public domain, I'm only repeating that, that we are completely in sync with the ministry, both ministries, Ministry of Railways, Ministry of Finance, as well as other multilateral, bilateral trying to get a solution where IRFC will have the first right on the pie. And that pie, I can give you a flavor, that pie will be going forward, maybe from FY '28 onwards for next decade, minimum 50,000 crore every year coming from the Indian Railways table. But also to mention you, now that we have started diversification, we are not going to stop funding to non-railway entities in the railway ecosystem. So, you'll see hand-by-hand looking at us funding the metros, looking at at us to funding government ports, looking at us to fund the renewable requirement of the Indian Railways. So, it is it is now that we have started our journey, maybe 20 FY '28 onwards for non-stop 10 years, you'll find that this kind of disbursement maybe in tune of 50,000 crore plus minus will be continuous growth for Indian Railway Finance Corporation.
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