IRFC posts record first-half profit as diversification lifts earnings, declares Rs 1.15 interim dividend

Indian Railway Finance Corporation Ltd. reported its highest-ever first-half profit, with profit after Tax rising 10.31 per cent year-on-year to Rs 3,885.69 crore for the half year ended September 30, 2026. The railway financier also declared an interim Dividend of Rs 1.15 per equity share for FY2026-27, the highest dividend payable in a single tranche.

The company’s total income for the first half rose 22.77 per cent to Rs 16,315.80 crore. The result reflects IRFC’s push to expand beyond its traditional leasing relationship with Indian Railways into railway-linked infrastructure financing, including power, renewable energy, ports, Logistics and other government-linked projects.

For the September quarter, PAT increased 10.21 per cent to Rs 1,958.48 crore from Rs 1,776.98 crore a year earlier. Revenue from operations rose 23.45 per cent to Rs 7,866.41 crore, while total income stood at Rs 7,924.46 crore.

However, the quarterly numbers also underline the importance of funding costs to IRFC’s earnings model. Finance costs climbed 30.22 per cent year-on-year to Rs 5,917.08 crore during the quarter, rising faster than total income. Despite this, the company maintained an annualised net interest margin of 1.50 per cent and reported zero non-performing assets.

Chairman and Managing Director Manoj Kumar Dubey said the contribution from railway-linked businesses beyond Indian Railways was helping improve margins, profit and net interest margin under the company’s IRFC 2.0 strategy.

‘Under IRFC 2.0, our continued railway-centric diversification is reaping rich dividends,’ Dubey said. He added that the company was preparing to finance newly sanctioned dedicated freight corridors, high-speed rail corridors, port expansion and renewable-energy projects that have power purchase agreements with Indian Railways.

The balance sheet continued to expand during the first half. Net worth rose to a record Rs 60,573.35 crore as of September 30, 2026, compared with Rs 56,748.76 crore as of March 31, 2026. Total assets increased to Rs 5,27,976.59 crore from Rs 5,16,676.48 crore.

IRFC reported lease receivables of Rs 3,67,288.29 crore and loans to companies of Rs 35,642.42 crore at the end of September. Cash and cash equivalents rose sharply to Rs 29,946.38 crore from Rs 211.31 crore as of March 31, while net cash generated from operating activities stood at Rs 37,212.48 crore in the first half, against Rs 17,287.30 crore a year earlier.

The dividend record date is October 23, 2026, and the payment is to be made within 30 days of declaration to eligible shareholders.

The dividend and record profit come as IRFC seeks to reduce its historical dependence on Indian Railways, which remains its principal customer, by building a broader government-linked infrastructure loan book. Management has previously indicated that many greenfield infrastructure agreements are disbursed in phases over several years, making conversion of sanctioned projects into funded assets a key execution metric.

As of 11:52 am on October 22, 2026, IRFC shares were trading at Rs 77.00. The stock was up 0.26 per cent from its previous close, but remained about 42.3 per cent below its 52-week high of Rs 133.50 and only about 3.8 per cent above its 52-week low of Rs 74.15. Over the past year, the shares have declined 38.16 per cent, compared with an 8.25 per cent fall in the BSE 500.

Disclaimer: The article is for informational purposes only and not investment advice.