The shares of the top financial and investing services rose up to 1 percent after a well-known brokerage suggested a ‘buy’ recommendation.
With a market capitalization of Rs 22,116.48 crore, the shares of IIFL Finance Ltd were trading at Rs 579.75 per share, decreased around 0.12 percent as compared to the previous closing of Rs 580.45 apiece.
Looking into IIFL Finance’s performance, revenue increased by 25 percent from Rs 2,121 crore in Q3FY23 to Rs 2,647 crore in Q3 FY24. During the same period, net profit increased by 29 percent, from Rs 423 crore to Rs 545 crore.
Motilal Oswal, one of the well-known brokerages in India, gave a ‘Buy’ call on the Fintech stock with a target price of Rs 800 indicating a potential upside of 38 percent from Thursday’s price of Rs 579.75 per share.
Here’s the reason for the potential upward target:
● IIFL Finance (IIFL) diversifies its loan portfolio including home, property, gold, microfinance, and personal loans. Sustainable AUM growth is driven by expanded physical and digital reach and early adoption of co-lending with banks, along with a direct assignment strategy.
● As per the brokerage, the company’s Net interest margin (NIM) is likely to improve from 6.2 percent in FY19 to 8 percent in FY24E, supported by an improvement in the product mix and a decline in the cost of borrowing (CoB).
● IIFL is the second-largest gold loan NBFC in India in terms of AUM and the third-largest in terms of on-book loans. It has over 2,700 gold loan branches in 25 states/UTs. The northern and western regions account for 60 percent of its gold AUM, respectively.
● IIFL Finance leverages key strengths in its gold lending business, with a robust physical distribution network and strong brand recognition, fostering trust. Strategic brand positioning efforts have led to 70% repeat customers in gold loans.
IIFL Finance Ltd is a diversified NBFC in India that lends and mortgages through its subsidiaries. It provides a diverse range of products, including home loans, gold loans, business loans, microfinance, capital market finance, and developer and construction financing, among others.
Written by:- Abhishek Singh
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