Document Context

IndoStar Capital Finance Limited (Scrip Code: BSE 541336, NSE: INDOSTAR) submitted an intimation to BSE Limited and the National Stock Exchange of India Limited under Regulation 30 of the SEBI Listing Regulations. Dated May 28, 2026, and signed by Company Secretary & Compliance Officer Shikha Jain, the letter serves to inform the exchanges about the company's Audited Standalone and Consolidated Financial Results for the quarter and financial year ended March 31, 2026, which were announced on May 27, 2026. A press release providing the results is enclosed as Annexure I.

Operational and Financial Highlights

Disbursements: Disbursements for Q4FY26 stood at ₹1,306 crore. This represents a 17% sequential growth over Q3FY26 (₹1,116 crore implied) and a 21% growth year-over-year compared to Q4FY25.

Assets Under Management (AUM): AUM as of March 31, 2026, was ₹8,056 crore. This registered a 5% increase compared to the previous quarter (Q3FY26), supported by growth across both the Vehicle Finance and Micro Loans Against Property (M-LAP) segments.

Net Interest Income: On a standalone basis, Net Interest Income grew by 3% quarter-on-quarter (QoQ) and 20% year-on-year (YoY). This growth was supported by a continued reduction in borrowing costs.

Pre-Provision Operating Profit (PPOP): PPOP for Q4FY26 stood at ₹93 crore. This reflects a growth of 10% QoQ and 51% YoY, driven by improved operating efficiencies.

Cost of Funds: The company's weighted average cost of funds declined to 10.2% in Q4FY26 from 11.0% in Q4FY25, representing an improvement of 80 basis points.

Asset Quality: The Company's asset quality remains stable. Gross Stage 3 assets were 4.77% and Net Stage 3 assets were 2.09% as of March 31, 2026.

Detailed Financial Results (Standalone)

| Particulars (₹ in crore) | FY26 | FY25 | Y-o-Y % | Q4 FY26 | Q4 FY25 | Y-o-Y % | Q3 FY26 | Q-o-Q % |

| Net Interest Income | 771.7 | 663.1 | 16.4% | 214.7 | 179.2 | 19.8% | 209.2 | 2.6% |

| Operating expense | 506.0 | 481.5 | 5.1% | 121.5 | 119.5 | 1.7% | 124.2 | -2.1% |

| Pre-provision operating profit | 266.5 | 190.1 | 40.2% | 93.3 | 61.8 | 51.0% | 85.2 | 9.6% |

| Profit/(loss) after tax | 130.2 | 52.6 | | (424.0) | 12.4 | | 8.3 | |

| CAR (%) Standalone | 36.1% | 28.5% | | 36.1% | 28.5% | | 41.4% | |

| Leverage (D/E) | 1.45 | 2.03 | | 1.45 | 2.03 | | 1.23 | |

Security Receipts and Provisioning

The Company made an additional provision of ₹326.13 crore against its legacy portfolio of Security Receipts (SRs) as a step to de-risk the balance sheet from potential future volatility.

As of March 31, 2026, the gross carrying value of SRs stood at ₹1,607.78 crore. The net carrying value was reduced to ₹588.63 crore from ₹1,022.60 crore as of March 31, 2025. The provision coverage ratio on SRs increased to 63%, compared to 26% a year ago.

The Company maintains strong visibility on recoveries from its SR portfolio and expects to realize the current net carrying value of approximately ₹588.63 crore in due course.

Macroeconomic Developments and Management Overlay

Geopolitical developments in West Asia during the quarter introduced heightened macroeconomic uncertainties, particularly through volatility in energy prices and potential supply chain disruptions. Given the evolving nature of these developments and limited data, the full impact is not yet captured within the Expected Credit Loss (ECL) framework.

As a prudent measure, management undertook a qualitative assessment of potentially exposed portfolios and recognized an additional management overlay of ₹49.00 crore during the quarter. The Company will continue to monitor external developments and reassess the adequacy of this overlay in subsequent reporting periods.

Strategic Initiatives

Technology Transformation: The Company strengthened data science capabilities across sourcing, underwriting, collections, and fraud intelligence. Automated scorecard-based approvals for Cars and Small CVs are operational, with 44% of disbursements executed through straight-through processing; bounce rates reduced by 15% in the last quarter. Scorecard coverage is expected to expand to nearly 70% by March 2027. The Company rolled out E-application, E-agreement, and E-NACH, improving onboarding efficiency. In May 2026, it received approval to undertake Aadhaar-based authentication (e-KYC).

Branch Expansion: The Company operates through 454 branches across 24 states and union territories. The Micro LAP business branch count increased from 91 in Q3FY26 to 108 in Q4FY26, with a strong presence in Andhra Pradesh, Gujarat, Tamil Nadu, and Telangana. This expansion involved no incremental infrastructure cost as these branches are co-housed with existing CV branches.

Talent Onboarding: The Company strengthened its leadership team by onboarding key senior professionals, including a Head Analytics to enhance data-driven decision-making. It appointed National Sales Managers across Farm Equipment, Construction Equipment, and Micro LAP segments to accelerate business expansion.

Company Background

IndoStar is a retail NBFC, classified as a middle-layer NBFC by the RBI, focused on secured lending across Vehicle Finance (VF) and Micro Loans Against Property (M-LAP). It is professionally managed and institutionally owned, with Brookfield & Everstone as co-promoters.