Indian Railway Finance Corporation (IRFC) has reported a remarkable 10% year-on-year (YoY) growth in its profit after tax (PAT) for the quarter ended September 2025 on October 15, 2025. The company’s net profit surged to ₹1,777 crore, up from ₹1,612 crore in the same quarter last year. This solid performance highlights IRFC’s ongoing strategic diversification efforts and its ability to generate sustainable profitability in a challenging market environment.
However, the corporation faced an 8% decline in its revenue from operations, which stood at ₹6,372 crore compared to ₹6,899 crore during the same period in the previous fiscal year. Despite the drop in revenue, IRFC demonstrated strong growth in its net profit, which saw a marginal increase of 1.7% from ₹1,746 crore in the previous quarter (Q1FY26). The decline in revenue, primarily attributed to lower lease income, was offset by increased interest income and effective cost management.
Key Highlights of IRFC’s Q2 FY2026 Results
- Net Profit: ₹1,777 crore, reflecting a 10% YoY growth.
- Revenue from Operations: ₹6,372 crore, an 8% decline YoY.
- Dividend: Interim dividend of ₹1.05 per share declared, with a record date set for October 24, 2025.
- Segment Performance:
- Interest Income: ₹2,829 crore, a significant increase from ₹1,497 crore in Q1FY26.
- Lease Income: ₹3,543 crore, down from ₹5,404 crore in Q1FY26.
- Expenses: ₹4,595 crore, lower than ₹5,173 crore in the previous quarter.
A Positive Trend in Assets Under Management (AUM)
IRFC’s diversification strategy has been instrumental in its strong financial performance. The corporation’s AUM now stands at ₹4.62 lakh crore, reflecting a positive growth trajectory even without the addition of new projects from Indian Railways in recent years. The company’s proactive business development efforts have enabled it to secure new business sectors, enhancing its margins and profitability.
This diversification has contributed to an improvement in its net interest margins (NIMs) and helped maintain a zero non-performing asset (NPA) track record, ensuring financial stability and investor confidence.
Strategic Diversification Driving Future Growth
The corporation’s diversification strategy continues to bear fruit, as new business lines are expected to propel growth in the coming quarters. The introduction of these new sectors has resulted in improved NIMs, and the company is well-positioned to expand its asset base as it enters the second half of FY2025-26. IRFC’s strategic positioning as a key financier for railway-linked infrastructure projects remains strong, as it continues to support India’s infrastructure development while maintaining financial prudence.
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Conclusion
IRFC’s Q2 FY2026 results reinforce its resilience and ability to adapt to a changing market landscape. Despite a decline in revenue, the company’s strategic diversification has played a key role in driving profitability and maintaining financial strength. The announcement of the highest-ever interim dividend reflects the company’s commitment to rewarding its shareholders while sustaining its growth trajectory.
As IRFC continues to explore new avenues for growth and expand its AUM, it remains a pivotal player in India’s infrastructure financing space, poised for further success in the years ahead.
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