Brokerage house Motilal Oswal is bullish on IIFL Finance citing the financial services firm's adeptness in effectively implementing an asset-light model propelling sustained profitability.
It has initiated coverage on IIFL Finance with a "buy" rating and set a price target of ₹800 per share, suggesting a potential upside of 25%. The brokerage highlights IIFL Finance's proficiency in mastering the asset-light model, contributing to sustained profitability.
Additionally, the anticipation of a credit rating upgrade further enhances its outlook.
The broking firm said that IIFL Finance is poised for a 25% compounded annual growth rate (CAGR) in assets under management (AUM) with a robust 20% or more return on equity (RoE).
IIFL Finance is one of India's leading retail-focused non-banking financial companies (NBFCs), boasting a customer base of over 85 lakh and a workforce of 35,000 employees.
Last month, Prem Watsa-owned Fairfax, which held 20.89% stake in IIFL Finance offloaded 5.2% stake in the company through an open market transaction, according to sources.
IIFL Finance has expanded its business, doubling its branch network to 4,400 within three years. In FY23, the company reported a profit of ₹1,608 crore and an Assets Under Management (AUM) of ₹68,178 crore as of June 2023. According to an official release, IIFL Finance has set a target of achieving ₹1 lakh crore AUM and ₹3,500 crore in profit by 2025.
The stock has gained more than 450% in the last three years and 36% in the last one year.
At 10.12am, shares of IIFL Finance were trading 1.04% higher at ₹ 641.5 apiece on January 5.
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