The Indian Non-Banking Financial Company (NBFC) landscape is undergoing a significant shift, and IIFL Finance Ltd is currently in the spotlight. The following is a comprehensive review, updated on January 22, 2026, and an investment analysis platform, MarketsMOJO, has officially upgraded the stock to a ‘Buy’ rating.
As of January 31, 2026, the company’s financial track record suggests a strong recovery and a strategic pivot that is catching the attention of institutional investors and market analysts alike.
Why MarketsMOJO Upgraded IIFL Finance to ‘Buy’
The upgrade from a Mojo Score of 65 to 71 reflects a fundamental improvement in the company’s operational health. This ‘Buy’ recommendation is not just a surface-level nod; it is backed by a spike in net profitability and a stabilised technical outlook.
Exceptional Q3 Earnings: A 500% Profit Surge
The most striking figure in IIFL’s recent performance is the 513.57% surge in net profit compared to the previous year. For the quarter ending December 2025, the company reported:
- Net Sales: ₹3,427.45 crores (Record High)
- PBDIT: ₹2,147.26 crores
- Profit Before Tax (PBT): ₹657.60 crores
These numbers underscore a successful “portfolio reset.” By exiting high-risk, unsecured segments and doubling down on secured assets, particularly Gold Loans, which grew 189% year on year, IIFL has effectively de-risked its balance sheet.
Efficiency and Shareholder Value
Return on Equity (ROE) is a litmus test for how effectively a company uses shareholder capital. IIFL Finance currently maintains an ROE of 14.17%, a healthy benchmark in the NBFC sector. This efficiency, combined with the board’s recent announcement of an interim dividend of ₹ 4 per share, signals management’s confidence in sustained liquidity.
Market Performance: Outpacing the BSE500
While the broader market has seen modest growth, IIFL Finance has been a standout performer for long-term holders. Over the past year, the stock has delivered a 49.94% return, vastly outperforming the BSE500 index’s 7.95% gain.
Investors note that: Despite a recent short-term dip of 12.22% over the last month, typical of the volatility seen in small-cap stocks, the six-month trend remains positive at 5.23%, supporting a “mildly bullish” technical stance.
Institutional Confidence is Climbing
Sophisticated market players are voting with their wallets. Institutional investors now hold 36.93% of the company, up 1.03 percentage points from the last quarter. This rise in “smart money” often precedes long-term price stability, as institutional backing usually follows rigorous fundamental due diligence.
Looking Ahead: Growth vs. Valuation
While the stock is currently tagged with an “expensive” valuation grade, many analysts argue that this premium reflects its high-growth trajectory. With Gross NPAs trending down to 1.6% and a strategic focus on collateral-backed retail lending (Gold and Home loans), IIFL is positioning itself to capitalise on India’s expanding credit demand.
For investors, the current ‘Buy’ rating signals fundamental strength. However, as with any small-cap investment in the financial sector, a balanced approach that accounts for market volatility is recommended.
