Accumulate India Infoline; target of Rs 96: PLilladher

9671 Investors following India Infoline. Share this News with them.

0

Like this story, share it with millions of investors on M3

Accumulate India Infoline; target of Rs 96: PLilladher

Prabhudas Lilladher is bullish on India Infoline and has recommended accumulate rating on the stock with a target of Rs 96 in its February 7, 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Sell ONGC; target of Rs 1100: Aditya Birla Money Buy Andhra Bank; target of Rs 185: Karvy Stock Broking Sell HDFC; target of Rs 570: Aditya Birla Money ALSO READ See previous views by Prabhudas Lilladher See what other Experts & Brokerages are saying about India Infoline See messages about India Infoline India Infoline BSE | NSE 30/05/12 Are Mutual Funds betting on India Infoline?

Prabhudas Lilladher is bullish on India Infoline and has recommended accumulate rating on the stock with a target of Rs 96 in its February 7, 2011 research report.

"India Infoline (IIFL) reported strong revenues growth (58.6% YoY and 35.3% QoQ) and steady PAT growth (12.7% YoY and 23.8% QoQ). Much of the outperformance came due to high growth in Financing Income (79.9% QoQ) which was led by certain extraordinary items. EBITDA margins stood at 47.8% which is a growth 790 bps sequentially."

"Average Daily Volumes (ADV) increased by 35.3% QoQ to Rs 62.3 billion while market share on NSE increased to 4.2% from 3.9% in Q2FY11. Much of the increase in ADV and market share can be attributed to higher arbitrage volumes (recently started). Excluding arbitrage the market share gain was about 0.1-0.15 percent points QoQ. Broking Yields on client business stood at about 5bps (about flat QoQ). Financing Income for the quarter grew by a stupendous 79.9% QoQ. However almost Rs 650 million of this was on account of episodic IPO financing and sale of investment (Coal India shares). Excluding that the growth was a still impressive 28.0% QoQ. However, given the sharp increase in short-term interest costs the company's spreads have contracted from 7.0% in Q2FY11 and 9.0% in whole of FY10 to 4.9% in Q3FY11. IIFL's average cost of borrowing stood at about 8.5%, while the incremental cost for short-term borrowing stands at about 11%. The steady state loan book stood at Rs 29.7 billion at the end of the quarter compared to Rs 25.0 billion at the end of Q2FY11."

"The company completed its announced share buyback programme during the quarter. It bought back 12.9 million shares and used up about Rs 1.04 billion of Cash for the same. The outlook for most of IIFL's businesses remains difficult (poor Cash volumes in broking, few transaction in IB, lower spreads in financing and reducing commissions in Insurance distribution). However, we believe at just 1.2x FY12 BV long-term investors would find immense value in the stock. Accumulate the stock with a target of Rs 96," says Prabhudas Lilladher research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment