IndoStar Capital Finance Limited — PPTs, 13-08-2025: Investor Presentation

**1. Financial Highlights:**

IndoStar Capital reported Q1 financial results, with Net Profit (PAT) of 535 Cr largely driven by a one-off 1,176 Cr exceptional gain from the HFC business sale. Excluding this, core operations saw a pre-tax loss. Total AUM stood at 7,783 Cr, a slight dip quarter-on-quarter. Asset quality improved significantly, with Gross Stage 3 at 4.04% and Net Stage 3 at 1.68%, supported by a higher 59.4% Provision Coverage Ratio. Net Interest Margin (NIM) rose to 6.2%, and borrowing costs reduced to 10.5%. However, the Cost to Income ratio increased to 88.1%.

**2. Strategic Initiatives & Growth Drivers:**

The company continues its strategic pivot towards retail lending, particularly in Vehicle Finance and the rapidly growing Micro LAP segment (AUM up to 76 Cr), aimed at risk diversification. It's expanding its footprint with 451 branches across 23 states.

**3. Business Developments:**

A key development was the divestment of its Housing Finance business, which generated a substantial one-time exceptional gain. The company's Vehicle Finance segment now strongly focuses on used vehicle disbursements (99% in Q1).

**4. Market Position & Competitive Advantage:**

IndoStar solidifies its position as a retail-focused lender with a broad national presence. Improving asset quality trends and a diversified borrowing profile, alongside stable credit ratings (AA-/A1+), enhance its competitive standing.

**5. Investor Implications:**

While the headline profit is impressive, investors should note its one-off nature. Focus on core profitability and the high Cost to Income ratio. The strategic shift to retail, improving asset quality, and robust liquidity offer positive long-term growth potential and financial stability.