IRFC Posts Record Q3 Profit as Margins Offset Revenue Dip
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- Last Updated: 20 Jan 2026 at 7:34 PM IST
Indian Railway Finance Corporation (IRFC) delivered its strongest quarterly profit to date in the December quarter. This happened even as revenue from operations slipped slightly due to a temporary moratorium on a railway project lease.
The state-owned financier on Monday reported a 10.5% year-on-year rise in profit after tax (PAT) for the third quarter ended December 31, 2025. PAT stood at ₹1802.19 crores, the highest ever in a single quarter for the company. In the same period last year, IRFC had posted a net profit of ₹1631 crores.
For the nine months ended December 2025, net profit rose 10.47% year-on-year to ₹5324.86 crores, compared with ₹4820.13 crores in the year-ago period.
Revenue Softens, Margins Step Up
However, the company’s revenue from operations declined 1.5% year-on-year to ₹6661 crores in the December quarter. A year earlier, the company had reported operating revenue of ₹6763 crores.
IRFC said the fall was mainly due to a one-year extension of a moratorium granted by the Ministry of Railways for a project lease agreement. This delayed revenue recognition for the quarter. Analysts noted that the impact is timing-related rather than structural.
Despite the revenue dip, profitability improved, with net interest margins rising more than 8% year-on-year during the quarter. The company attributed this to value-accretive disbursements across segments and tighter control over borrowing costs under its IRFC 2.0 framework.
Total income for the quarter stood at ₹6719.23 crores. For the nine-month period, total income stood at ₹20,009.38 crores, supported by diversification beyond traditional railway financing. Brokerage estimates suggest that margin-led growth has now become a more visible part of IRFC’s earnings profile, reducing its dependence on pure volume growth.
Management View
Commenting on the performance, IRFC chairman and managing director Manoj Kumar Dubey said the quarter reflected strong execution under the IRFC 2.0 strategy.
He added that the company has already achieved its annual sanction guidance of ₹60,000 crores within the first nine months of the financial year. Market participants see this as a sign of faster execution and a healthy pipeline.
What Lies Ahead?
Looking ahead, IRFC expects the benefits of higher-margin diversified lending to become more visible from the next financial year. The company also anticipates fresh project agreements with Indian Railways once the moratorium period ends.
Analysts tracking the railway financier feel that the company’s near-term focus will be on how quickly deferred railway-linked revenues return to the books. For now, IRFC’s December-quarter numbers suggest the company is managing the transition well. Even with a softer top line, profit growth has held firm. Investors, at least for this quarter, have little to complain about.
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