IIFL Finance on Thursday reported a multifold jump in its consolidated net profit at Rs 248 crore in the last quarter of the fiscal ended March 2021 on healthy revenues from operations such as interest income. The non-banking financial company had posted a net profit of Rs 59 crore in the corresponding quarter of the previous financial year 2019-20.

Nirmal Jain, Chairman and CEO of the company said that they are expecting the economy to get back on its feet soon, but are cautious on the microfinance and unsecured business segment.

“The unsecured part of our portfolio, which is part of our business loan and microfinance, one has to be cautious. We have aggressively taken write-offs and provisions in last quarter looking at the scenario in April,” he said in an interview to CNBC-TV18.

However, he believes that the company’s gold loan and home finance portfolio will provide some cushion.

“There is a pain in the microfinance and unsecured business loan, but fortunately for us, the dominant part of our portfolio is a gold loan and home loan where we have good quality collateral and typically losses are much lower. So, the NPAs or collection efficiency is also much better,” he said.

Jain also said that the last year COVID provisions were 3 times of normal provisions and they will take aggressive provisioning if COVID second wave remains severe.

“Historically before COVID, our credit cost has been around 80-100 basis points of the portfolio. But if you look at our provision in last year of COVID, it has been almost 3 times that much. So, if the COVID situation continues for some time, then we will have to continue to provide aggressively the way we did last year,” he said.

He is also expecting some recovery from written-off amounts.

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(Edited by : Abhishek Jha)